McDonald’s chicken sandwich
Source: McDonald’s
McDonald’s wants to win the lower priced chicken sandwich war, while Burger Brands at Restaurant Brands International is still trying to figure out its strategy, according to a report by Credit Suisse.
In August 2019, Burger King’s sister chain, Popeyes, started the chicken sandwich war with the launch of its own version of the menu item. Social media users confronted him with Chick-fil-A’s, and the Popeyes sandwich quickly became a hit, driving sales growth in the same double-digit store and adding about $ 400,000 in annual sales for each location .
“We expect competition to heat up in 2021, as brands in all segments raise their offerings to take a bite out of the chicken category and improve their competitive position,” wrote Lauren Silberman, an analyst at Credit Suisse, in a note on Friday. market.
McDonald’s is about to launch its own version on February 24, and Yum Brands’ KFC is launching one nationwide by the end of the month. Burger King is still in the testing phase.
McDonald’s new crispy chicken sandwich is hurting its main rivals, according to Silberman. The hamburger chain sandwich is costing $ 3.49 to $ 3.69 in test markets, compared to the $ 3.75 sandwich from Chick-fil-A or the $ 3 version, 99 from Popeyes.
McDonald’s may have learned a lesson from its latest onslaught on chicken sandwiches. Their Buttermilk Crispy Chicken Sandwich, which was first launched in 2015, had a premium price.
Silberman estimates that restaurants in McDonald’s test markets are selling an average of 125 to 150 crispy chicken sandwiches a day. If restaurants reach the upper limit of this range when the item is launched across the country, the sandwich could increase the company’s same-store sales by 4%, according to Silberman.
Burger King, on the other hand, still seems to be working on its pricing strategy. Silberman wrote in the note that one of his test markets is valuing the new sandwich at $ 5.29, well above its rivals. But two other test markets are pricing the sandwich at a discount, which ranges from $ 3.49 to $ 3.89. In markets that are not testing the new sandwich, the hamburger chain usually charges more for the current chicken sandwich.
So far, Burger King restaurants are selling about 60 to 75 chicken sandwiches a day, on average, according to data from Credit Suisse. The new sandwich can increase its same-store sales by up to 4% if it sells 75 sandwiches per restaurant when it launches across the country.