Burger King looks to be packing on the sales, while the register at McDonald’s (MCD) may be a tad slimmer.
“We believe the war and rising gas prices are partly to blame [for slowing McDonald’s sales], contributing to overall US same-store sales growth slowing from 3% in early March to flat year over year in the last three weeks,” Evercore ISI restaurant analyst David Palmer wrote in a new note. “That said, it is also true that McDonald’s has been underperforming peers such as Burger King in the wake of viral ‘CEO burger-bites’ videos and the subsequent taste tests of the Whopper vs. the Big Arch burger.”
Palmer added, “During McDonald’s US slowdown, we believe breakfast — perhaps a more discretionary day-part when consumers feel pressure on discretionary income — has been particularly weak.”
A new fast food burger battle erupted on social media in early March, and McDonald’s CEO Chris Kempczinski led the way, going viral in a promotional video where he tried the company’s new Big Arch burger. The clip was widely mocked for his seemingly hesitant approach to eating the burger, taking an unusually small, delicate bite and repeatedly referring to the burger as a “product.”
Capitalizing on the backlash, Burger King US and Canada president Tom Curtis released a TikTok video three days later. It featured him taking an enthusiastic bite of a Whopper and joking that the only thing missing was a “napkin.”
Curtis’ viral moment also shed light on the revamped Whopper, which has long been the company’s answer to McD’s Big Mac.
Burger King made several subtle but meaningful changes to its Whopper for the first time in nearly a decade. The updated burger now features a more premium, better-tasting bun and a reformulated, creamier mayonnaise. Toppings like lettuce, tomatoes, onions, and pickles are prepared to taste fresher and be stacked more neatly.
Another major change is the packaging: Instead of being wrapped in paper, the burger is now served in a box to prevent it from getting squished and to maintain its presentation.
McDonald’s stock is down 6% in the past month, lagging the 6% gain for Burger King parent company Restaurant Brands (QSR).
Burger King’s momentum versus McDonald’s is about to be tested.
McDonald’s will soon introduce its much-hyped new value menu and a new line of drinks, including a creamy vanilla cold brew coffee. The value menu — hitting stores April 21 — will offer a range of items under $3.
“US franchisees have unanimously approved the McValue menu (coming on April 21) and nationally featuring a $2.50 McDouble and $1.50 Sausage McMuffin for a limited time,” Evercore ISI’s Palmer wrote. “This menu — similar to Taco Bell’s successful Luxe Menu — is designed to provide low entry price items on an a la carte basis (unbundled). This may help address McDonald’s traffic issues with low income consumers.”