Banner Image

Burger Wars Heat Up On Value Perception

Article from: 
US
Thu, 28/01/2016 - 17:49
McDonald's

The annual January burger wars, when the three big chains roll out deals and heavy marketing for post-holiday dollars, is already lifting value perception with fast food eaters across the board.

However, the potential revenue impact seems likely to be minor.

Even McDonald’s, which just announced its best U.S. quarterly sales in nearly four years mainly attributable to its all-day breakfast menus, has seen its purchase consideration come back down to earth after the first of the year. However, they still lead the group in this important key potential revenue metric, and at levels above their pre-breakfast rollout.

Wendy’s kicked off the battle first at the end of December with a “4 for $4” bundle, which included a Jr. Bacon Cheeseburger, chicken nuggets, small fries and a small drink. McDonald’s followed suit on Jan 4th with its McPick 2 – letting customers buy any two items from a small menu for a $2 total. One day later, Burger King unveiled its “5 for $4”: a bacon cheeseburger, small French fries, four-piece chicken nuggets, a small drink and a chocolate chip cookie for $4.

The value perception metrics have been rising for all three chains throughout January, led by Wendy’s, followed by a tie between McDonald’s and a surging Burger King, which showed the greatest growth.

Yet, the impact on fast food customers actually considering buying from the burgeries has been minimal so far. Burger King crawled up from fast food eaters considering buying from them 32% of the time to just 33%. Wendy’s was not much better, going from 38% to 40%.

McDonald’s purchase consideration rose all fall long, likely thanks to the all-day breakfast introduction, leading to its highest score in 18 months at 48% in mid-December. Even though it has cooled off to 44% now, they still lead the hamburger chain sector.

Value: Burger Restaurants. Base: fast food eaters.
Value: Burger Restaurants.  Base: fast food eaters.
Purchase Consideration: Burger Restaurants. Base: fast food eaters.
Purchase Consideration: Burger Restaurants.  Base: fast food eaters.
People Illustration