Sozzi: Burger King Takes a Bite out of McDonald's Customer Base
NEW YORK (TheStreet) -- There will always be two major wars in the land of food to watch. Coca-Cola
First, let's set this up with a few observations:
- McDonald's U.S. same-restaurant sales were down in January, February and in the fourth quarter of 2013. On the other hand, Burger King's same-restaurant sales improved each quarter of 2013, and were positive in the fourth quarter.
- Burger King shares are up a sizzling 15.3% year to date compared to a meager 0.86% gain for McDonald's. While McDonald's is complaining of competitive industry conditions, overhauling its exec team, and handing out free coffee, Burger King has shared more positive things with investors in every quarterly release dating back to the first quarter of 2013.
There are three specific reasons for the Burger King revival, which is especially impressive considering the growing popularity of Chipotle
Marketing: Burger King is using craftier titles associated with new, premium, products that invoke emotions with customers. Are you more intrigued by an Angry Whopper from Burger King or a Bacon Clubhouse Burger from McDonald's? Exactly.
Perception of yumminess: Burger King is releasing burgers and sandwiches that connect with what a consumer is buying elsewhere. Fried onion petals. Jalapenos. Chipotle sauce. Turkey Burger. Combine that with Satisfries, and Burger King is able to build a perception amongst consumers that its products offer the biggest bang for the buck and are fresh ideas.
Execs get it: Whereas McDonald's is out of control with releasing new menu options that slow lines and confuse customers, from pastries to a $12 burger in Switzerland, Burger King is keeping it much simpler. In fact, the focus, according to the company is on "releasing fewer, more impactful products." By going that route, Burger King is able to market its new products more effectively.
Now I am off to grab a salad after taking about this greasy stuff. Brian Sozzi out.
-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.