A recent survey found that Americans visit fast-food restaurants a lot. In fact, they comprise many of the most frequently visited businesses in the nation. Which restaurants do we visit most often and what are reasons they top the list?
The recently released Placed survey found that more than half of the top 10 most-visited U.S. businesses were quick-service restaurants, indicating we're a ravenous and time-starved society.
The study found that McDonald's (NYSE: MCD) is the single most frequented business in the U.S., despite the company's same-store sales declines since early last year. The fast-food giant is scaling back its bloated menu, which has expanded by 70% since 2007 to roughly 145 items. Menu bloat has led to slower operations, tarnishing customer service. The company has more singularly focused on the value-conscious consumer, but the drive toward this consumer has hurt McDonald's. The Golden Arches saw weak earnings growth in the most recent quarter, due to sacrificing profit margins by focusing on value menus to avoid losing customers.
Competition is intensifying between Nos. 5 and No. 6 on the list, Burger King (NYSE: BKW) and Wendy's (NASDAQ: WEN), respectively. Following McDonalds' lead, both are undergoing restaurant renovations. Wendy's reported lousy earnings in the most recent quarter, mostly due to heavy remodel spending. Burger King is following Mickey D's another way -- by copying McDonalds menu. And, also like McDonalds, Wendy's is placing particular emphasis on value-centric consumers. The company has beefed up advertising of its lower-priced items more aggressively this year. Even though CEO Emil Brolick sees the value side of the business as a challenge, Wendy's plans to further hype up its stable of $0.99 menu items.
Taco Bell helped Yum! Brands (NYSE: YUM) secure the No. 9 position on the list. Taco Bell has been incredibly successful with its innovative Doritos Locos Tacos, with more than 500 million sold since the product's March 2012 launch. Typically visited for lunch or dinner, the taco maker will soon step up its presence earlier in the day. It plans to roll out its breakfast menu -- featuring items like bite-size Cinnabon-branded cinnamon rolls, breakfast wraps, oatmeal, and coffee -- nationwide by the end of 2014. Yum! hopes to double Taco Bell's domestic annual sales by 2021.
Not to be outdone by burger and taco shops, coffee giant Starbucks (NASDAQ: SBUX) sits between McDonald's and the rest of the pack, at No. 4 on the list. Transforming the way the world experiences coffee, Starbucks still possesses a great deal of international growth potential. And with its recent Teavana acquisition, CEO Howard Schultz intends to do for tea what Starbucks has done for coffee. A tall order, but one I wouldn't put past the caffeinated powerhouse.
Will these same quick-service restaurants make the list next year? That's anyone's guess. Consumers can be fickle and fussy. But we're not gaining hours in our days and our stomachs still rumble at noon, so it's likely fast-food businesses will once again rank near the top of the list.
McDonald's turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches maintain its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald's future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.