The Real King of Selling Burgers Sells You the Worst Burgers

Source: McDonald's

Whether they're packed tall in a Big Mac, wide in a Whopper, squarely sticking out of the bun, or served short in a slider, Americans can't get enough hamburgers.

If you ask the average American where they get their favorite burger, you might cause offense if you ask if the answer is McDonald's (NYSE: MCD  ) .

Yet even though the king -- it's not Burger King (NYSE: BKW  )  -- is the place we love to hate, it still wears the crown in terms of sales.

Apparently taste isn't really the king
Do you remember when Burger King used to say "Taste is King" in its commercials? Well, scratch that.

Consumer Reports conducted a survey of 32,405 of its subscribers in which it asked them to rank various fast food chains. What was the result? McDonald's hamburgers received the worst ranking. And Burger King came in just a hair higher.

Regional chain The Habit Burger Grill got the top ranking. In-N-Out Burger came in second. In total there were 21 burger restaurants in the running, yet the majority seemed to have trashed McDonald's and Burger King even though both were the biggest and best known of the names. Maybe that's the problem.

McDonald's still dominates
You would think that with McDonald's haters its individual stores would rank low on sales. Instead, as you probably already know, McDonald's remains one of the top sales-generating restaurants on a per-restaurant basis across the country.

Source: McDonald's

In 2012, the average McDonald's in the US generated sales of $2.6 million, much more than the sales per restaurant of other chains that beat it on taste.

In-N-Out Burger came in at $1.9 million per location, Burger King was way down at $1.2 million, and Five Guys was barely above $1 million.

Nobody even came close unless you throw chicken into the mix, and then Chik-fil-A beat McDonald's at $3.2 million per location.

That leads to two observations
Okay, so McDonald's loses the Pepsi challenge, yet McDonald's still sits on the throne in most markets where you find it. It seems like even towns with multiple McDonald's but only one location of a competitor with superior taste will often see more business at each McDonald's.  It's uncanny.

Conclusion No. 1 is that marketing rules. And something should be said for consistency, service, and trust. As much as many of us may say we hate McDonald's, one thing we know when we're in a rush and no matter where we are is that we feel confident we will get the same product, the same temperature, the same quality (even if it's not the best), and the same speed, from the same reasonably clean kitchen. In short, the risk is low.

Source: McDonald's

Second, perhaps there is something to that "location, location, location" thing you often hear about as the three secrets to success in the restaurant industry.

You have to admit it -- McDonald's has secured some really good real estate spots. With locations often at corners of major intersections, rest stops, and even inside of Wal-Mart, the convenience factor sure doesn't hurt. Perhaps part of its genius is location scouting since it sure doesn't seem to be winning too many blind taste tests.

Foolish final thoughts
The bottom line is that McDonald's clearly has great execution since it sells us such low-ranking food so successfully. I can only imagine how often we'd eat at McDonald's or Burger King if they actually started selling products, especially new kinds of burgers, that more of us raved about. 

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Read/Post Comments (18) | Recommend This Article (41)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 20, 2014, at 10:47 AM, Bobz74 wrote:

    Obviously the poll is flawed. People do not buy and eat what they don't like. Not even for marketing or convenience would people eat something they don't like. I would guess that with the criticisms of fast food in the media the more sheepish folks are afraid to admit that they actually like to eat a Big Mac.

  • Report this Comment On July 20, 2014, at 11:08 AM, elbob248 wrote:

    Marketing rules the weak minded.

  • Report this Comment On July 20, 2014, at 11:13 AM, UKIE1946 wrote:

    In 1968 I tried to convince my husband to buy Disney and McDonald's stock. He had other plans for our money. I look at that as the biggest mistake of our financial life. As far as burgers go, or any fast foods, my last visit was over 2 years ago to a McDonalds with my grandson. No amount of advertising will convince me to buy something I don't like.

  • Report this Comment On July 20, 2014, at 11:18 AM, SkipPlummer947 wrote:

    I think that they've all gone to Hades in a hand basket. Once upon a time, like when the first Burger King, ever, opened on Bird Rd (SW 40th ST) in Miami, FL, you could walk in, oder a Whopper with lettuce, tomato, onions, extra ketchup and mayonaise, and that was exactly what you got... and they were good!

    Now? Extra ketchup and mayonaise? "All that stuff is right over there; you put your own on..."

    This modern, silly way of doing business just illustrates the degradation of this country on the whole.

    Where McDonalds and Burger King are concerned, they just pay their workforce to stand there tossing dry hambugers and buns into a bag, and collect the money. It used to be that most of them couldn't even make change but now that's done for them, too.

  • Report this Comment On July 20, 2014, at 11:36 AM, SamCro wrote:

    Yep, and who do they market to? The low-lifes and ghetto people. This is what our country has become, tasteless, lazy and divided.

  • Report this Comment On July 20, 2014, at 12:38 PM, Nonomad wrote:

    Personally I only go to McDonald's ONLY IF I have a coupon. Why you may ask? POOR SERVICE!! The last time I was there I was the only person in line. The manager was on the register chatting with some guy and called a girl from the back to take my order. While waiting for my food, five people came in, ordered and GOT their food BEFORE me!

    After everybody received their food mine finally came up. Now for the kicker. Each time food was given out the order number was called and the person got a bag of food. When mine came out the girl asked what I ordered. HUH!!!! I told her my order number and she seemed unable to answer. Then I told her what I ordered and then she gave me my food.

    At least Burger King get's the service part right.

  • Report this Comment On July 20, 2014, at 1:09 PM, cberger5 wrote:

    These polls have some truth to them, but they do not look at the entire picture of the difference in store sales among other things.

    Mcdonalds has a vibrant breakfast scene which no other chain really has except Chick Fill A. The fact that In and Out Burgers get to nearly 2 million per store with their limited menu is amazing.

    McDonalds burgers may be pretty terrible, but they are cheap and popular with kids. McDonalds has the family market cornered. Chickfila is much more expensive.

    The article is also right on location which are the best in the business.

    To compare Five Guys and Mcdonalds is ridiculous. They usually have no drive throughs, a tiny menu and are generally in strip malls with almost no signage. Kids generally cannot eat their massive (But excellent burgers). At their prices Five Guys also is getting much more competition from other regional chains.

    In the end these polls pretty much tell us the obvious. High end hamburger chains are more expensive but their limitations keep them from having enormous sales. Burger King is dirty and badly managed. Chick-Fil-A is a star with very little real competition. Mcdonalds is truly the king. Mediocre food (Except french fries), great for kids, great locations, great signage, and great consistency.

  • Report this Comment On July 20, 2014, at 1:32 PM, Taz wrote:

    The very best burgers are usually made by mom and pop places. In my area that is the Daily Bread Bistro in San Tan Valley, (near Phoenix) AZ. If we're talking chains only then the next one would be Whataburger. Great sandwich and someone to visit your table with a tray of condiments. McD's is fast - that's about their only plus. The rest, including In-n-Out, are like eating frozen food.

  • Report this Comment On July 20, 2014, at 1:32 PM, InitialG wrote:

    You don't eat at McDonald's because the burger is great.

    It used to be that you ate there because it was cheap, something that you were familiar with (if you were out of town) and convenient.

    McDonald's is no longer cheap just familiar and convenient.

  • Report this Comment On July 20, 2014, at 4:37 PM, bcweir wrote:

    AVOID restaurants with drive through windows if you intend to dine in! The problem is that the drive thru window gets priority service no matter how many people are lined up at your counter! I had to wait 19 minutes from the time I got in line (no one was at the register, their ONE cashier just looked at me and the other customers as if we had just broken in through the roof to steal the cash drawer) to the time I got my food. Meanwhile the drive thru customers got their food in no more than two or three minutes tops! I walked out, went across the street to Sonic, and was EATING within seven minutes of placing my order.

  • Report this Comment On July 20, 2014, at 5:03 PM, rdchili96 wrote:

    Don't know how In N Out Burger is, since they do not exist east of Texas.

    Burger King burgers are great, but everyone loves to hate the big chains.

    McDonalds though, their burgers are pure crap

  • Report this Comment On July 20, 2014, at 5:31 PM, AlanM wrote:

    To me the #1 draw of McDonalds is their $1 large drink promotion that they have had regionally for many years. While traveling by car, that large foam cup and a place to set down and relax a bit to take a break is a significant draw. On the business side, self serve soft drinks are a major profit maker and most people will purchase something off their dollar and more menu. I am not aware of any other fast food chain with a significant highway presence that has this.

    Also McDonalds definitely has an edge with breakfast. Arby's does well, but when you think "fast food breakfast", you think "McDonalds".

    Their weakness is clearly their core product - the hamburger. Yet once in a while a Big Mac and fries does sound good.

  • Report this Comment On July 20, 2014, at 5:39 PM, maxsdad53 wrote:

    There's something incredibly suspect about surveys that call McDonald's and Walmart 'the worst', and yet they're by far the most popular and most widely shopped of their type of business. Quite frankly, if both were as bad as the media portrays, it would be reflected in their sales. Mickey D's may not be the favorite among fast food, but that doesn't mean it's like eating dog food.

  • Report this Comment On July 20, 2014, at 6:24 PM, Robert0F wrote:

    Ever heard of the Chum Bucket? They did their best selling when they had a Marketing Dept. There are so many "business" examples in that Sponge Bob cartoon.

  • Report this Comment On July 20, 2014, at 6:32 PM, WalkingMan wrote:

    Lived on peanut butter and white bread for months for several months.

    IN and OUT treat their employees like humans who extend this treatment to customers. It works, at least for all concerned. Their product is also very good. Nobody expects or receives a tip. I for one am sick of tipping - those stupid tip jars which allow the employer to escape humanity.

  • Report this Comment On July 20, 2014, at 8:09 PM, altizar wrote:

    I eat at Mcdonald's not because it tastes great, but because I can get a full day worth of food for under 6$. 2 hamburgers, large fries and a sweet tea. Anyplace else, would cost around 9$ for a meal. I haven't won the lottery yet so at a cool mill and retired at 42, I gotta watch how much I spend to survive day to day.

  • Report this Comment On July 21, 2014, at 9:14 AM, WallaceNDavis wrote:

    Have you no editors? "Worst" is a subjective judgement that no real journalist would put in a headline. Why not say "Lowest Rated." which is a statement of fact?

  • Report this Comment On July 21, 2014, at 10:26 AM, zorian wrote:

    OK, I have a McDonald's, Jack in the Box, Sonic, Wendy's and Taco Bell near my house. The last Wendy's burger got tossed as terrible. Sonic has a boring menu with NO bargain burgers, Jack has great food but of the two near me one does it right and the other (which seems to hire those low lifes someone mentioned) usually get the order wrong. And then there are the two McDonald's. Service is friendly and excellent. The drive through line has multiple order points so one is usually open or you are next in line. If they get a big order or something hard to fill they have a final window where cars can wait for those orders. If that gets busy, they have your order brought to your car in a parking space. It is incredibly efficient and keeps the line moving, which the other do not manage. They have several $2 burgers that are excellent and always made just the way you order them. One of those and a large fries and large drink is about $5, higher at the other places. I don't care about their marketing. I like their food and their service. There are plenty of reasons they are number 1.

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