McDonald’s Corporation (NYSE:MCD) poor earnings were the result of competitors’ sustained activities in the market as stated by the hamburger giant. This was the main reason why people refrained to dine there, thus causing a 2% decrease in comparable-store-sales for McDonald’s Corporation’s (NYSE:MCD) quarter compared to Burger King Worldwide Inc.’s(NYSE:BKW) 4.2% increase.
This was the fourth continuous quarter that Burger King Worldwide Inc.(NYSE:BKW) hit the market with growth while McDonald’s Corporation(NYSE:MCD) showed a decrease all throughout 2014. However, Burger King Worldwide Inc.(NYSE:BKW) did have help in its growth with limited-time offerings such as its chicken fries as well as its A1-ultimate bacon cheeseburger. This strategy proved effective as customers left franchises with smiles on their faces.
Burger King Worldwide Inc.(NYSE:BKW) was able to increase its sales with the right amounts of low-priced premium products. While on the other hand McDonald’s Corporation(NYSE:MCD) has faced difficulty in finding the best product to launch with its management reporting the complexity of its menu. However, the company aims to overcome this problem through its new initiative; create your taste. This initiative focuses on customization in the company’s offerings.
Don Thompson, the company’s CEO stated that the company is asserting more leadership through offering choice and customization in its offerings. Through this initiative, they aim at bringing in more customers through the door and eventually increasing their sales.
Speaking along investor terms, there hasn’t really been a rebound in McDonald’s Corporation’s (NYSE:MCD) performance. The company had flat comparable sales for January however; there still may be hope with the redesign in the company’s menu. Investors are on edge and it is vital for the company to prove itself.
On the other hand, Burger King Worldwide Inc.(NYSE:BKW) had been witnessing solid growths in return to its capital investments, which helped it modernize and redesign nearly half of its store base ahead of time. These remodeled stores resulted in a 14% average sales lift.
If we look closely, McDonald’s Corporation(NYSE:MCD) may have a competitive advantage given that it has enough cash to go against any kind of capital spending that competitors pull off. It aims to use billions in remodeling as its investment goal in 2015. While other investors such as Chipotle Mexican Grill Inc.(NYSE:CMG) has invested only $250 million in 2014. Therefore, McDonalds’ Corporation (NYSE:MCD) doesn’t have a cash crunch issue as yet, but it needs to figure out a way to attract customers as quickly as possible.
The recent increases in Burger King Worldwide Inc.’s(NYSE:BKW) sales give us this hope that people aren’t turning away from fast food. Therefore the hamburger giant does have a chance to turn things around for it and if it’s lucky it can even bring back its former customers.
However this isn’t as easy as it looks. Even with the budget and customer experience, the company will have to do much better. Let’s see just how well the company’s menu changes prove to be with respect to its growth.