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Gone are the days when you could walk into a diner, get your $0.50 cup of "coffee," and calmly read the paper while some waitress asked, "Anything else?" every 10 minutes. In today's coffee marketplace, $5 coffee comes and goes like the sun on a cloudy day, and we demand quick service to get us running out the door. This month's customer satisfaction scores from the American Customer Satisfaction Index included limited-service restaurants Starbucks (NASDAQ: SBUX ) , Dunkin' Brands' (NASDAQ: DNKN ) Dunkin Donuts, and McDonald's (NYSE: MCD ) -- no one came out looking like the clear winner.
The top two spots
In the whole limited-service division, Subway comes in at the top spot with a score of 83. The overall average for the sector was 80, and both Dunkin' and Starbucks hit that average. Dunkin' won out in cost -- which was no real surprise -- while Starbucks won the quality fight. The move to 80 was good news for Starbucks, which had fallen behind in 2012, when it dropped down to 76 -- four points below the sector average.
Dunkin' had a smaller move, rising one point over last year's position. In 2012, price seems to have trumped quality, and in its first year of ranking, Dunkin' had the edge on Starbucks. Now Starbucks has taken its cost issues to heart, and apparently made a move to improve the perception of its quality to make up for that extra cost. Regardless of which brand you pull for, both are better off than...
McDonald's comes in dead last
The burger clown didn't beat out any of its main competitors and fell in overall last place of named companies this year. In fact, looking back at rankings since 1994, no one has ever been ranked lower than McDonald's.
In terms of future growth, that's a bad place to be. As the company's brand continues to erode, it's going to lose market share to competitors like Dunkin' and Starbucks -- not to mention Burger King and Wendy's. That said, however, McDonald's also did better than it's ever done, scoring a 73 this year. As the report points out, "A decade ago, McDonald's was stuck in the low 60s."
McDonald's problem is that it's still lagging so far behind its peers. If it wants to make something more of its coffee offering, then it has to best Dunkin', at least. The two companies offer similar product ranges at similar prices, and if customers continue to favor Dunkin', the McCafe boat is simply going to sink.
For now, Starbucks and Dunkin' are the clear winners, and happy customers make happy investors. Keep an eye on McDonald's, though, as the chain has to get the idea at some point. Unfortunately, that some point isn't now.
McDonald's turned in a dismal year for investors in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim 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.