McDonald’s same store sales in October were not just good. They were much better than those of their direct competitors. But why? With more stories and higher market penetration, in theory smaller fast food retailers should be able to grow faster.But, the theory does not work. McDonald’s same store sales rose 5.5%. At Wendy’s, the figure was a pitiful 1.2%. At Burger King, the figure was 2.6%. McDonald’s also generate substantially more revenue per store than its rivals.Wall St. often wants to look for complex reasons as to why one company does better than the competition, espcially in a large market like fast food. How can one company, with products similar to its rivals, do so much better?Part of the reason is that McDonald’s is not focusing on increasing its number of stores, especially in the US. It has worked on increasing its revenue yield per store. But, that explanation in-and-of-itself is inadequate.It would appear that McDonald’s offers a menu that is, very simply, more attractive than what Burger King and Wendy’s have. The food is just as unhealthy any in the world. But, people like it more. McDonald’s is like Toyota. It just has a “line up” that buyers like better.If investors are looking for something more complex to give them comfort about the growing McDonald’s fast food lead they won’t find it.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Is McDonald’s Smarter Than The Competition? (MCD)(BKC)(WEN)
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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