Is Burger King Beating McDonald's in a Street Fight?

McDonald's shareholders will want to watch Burger King Worldwide’s earnings on Thursday.

Feb 12, 2014 at 3:00PM

On Thursday morning, Burger King Worldwide (NYSE:BKW) will release its fourth-quarter results. We will finally learn if Burger King is one of the culprits that is taking market share from McDonald's (NYSE:MCD). With Burger King's stock near 52-week highs at the time of this writing, look to its earnings results for clues on the fight that could send it to new highs or cause it to retreat.

The McDonald's clues
McDonald's same-store sales have been slipping backward. In the third quarter, U.S. same-store sales were up 0.7%. For October, they only grew 0.2%. For November, they declined by 0.8%, and overall for the fourth quarter they dropped by 1.4%, meaning that December saw a relatively sharp plunge.

On the conference call, CEO Don Thompson in part blamed the competition, implying that rivals may be taking some of McDonald's market share. He said, "It's a very competitive market out there, [there's a] lot of price [competition] going on and it's a fight for market share. It's a street fight and we are getting at it."

Is Burger King the one beating up McDonald's?
While McDonald's has been busy looking the other way by launching flops such as Mighty Wings, Burger King has been launching a number of initiatives that appear to be aimed at McDonald's jugular.

First, Burger King delivered a jab in September when it launched Satisfries, a lower-fat and -calorie version of its french fries that still maintain much of their taste. McDonald's has been trying to push apple slices as a healthy alternative, which, let's face it, is not a reason most people are showing up at the Golden Arches.

Second, Burger King launched the Big King sandwich in what is an obvious sucker punch against McDonald's Big Mac. It has three patties and two buns with special sauce. It looks and even kind of sounds like the Big Mac. Burger King doesn't even try to deny it. One TV commercial says, "The new Big King from Burger King may look familiar, but it's what's on the inside that counts. Our two fire-grill patties and king sauce makes all the difference." 

Third, less than two weeks after announcing the Big King, Burger King delivered a hard left hook to McDonald's by announcing the $1 BBQ rib sandwich right around the time McDonald's was promoting its McRib at a much higher price. Clearly, it's another direct attempt to steal McDonald's thunder.

Fourth, a few days later Burger King landed an uppercut by announcing it is moving into France, one of McDonald's strongest markets in Europe. Burger King plans to quickly take 20% of the market there through its "well-funded" partners.

Finally, and perhaps the knockout blow, Burger King launched its own spicy chicken sandwich, similar to McDonald's spicy McChicken sandwich. Burger King doesn't seem to be pulling any punches. Burger King doesn't seem to be finished beating up on McDonald's just yet and may kick the larger chain while its same-store sales are down.  

Foolish final thoughts
This vast direct assault on McDonald's is fascinating, but we still don't have official word on whether it's been effective and, if so, how effective. We should get a wealth of information with Burger King's upcoming report. The key metrics to examine will be same-store sales as well as comments from management on what it is seeing in terms of guest traffic and guest response to the introductions.

Will Obamacare affect Burger King and McDonald's?
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This FREE guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.


Nickey Friedman has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide and McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers