By Malcolm Berko- Dear Mr. Berko: What are McDonald’s largest competitors? They’ve got to be what’s
By Malcolm Berko- Dear Mr. Berko: What are McDonald’s largest competitors? They’ve got to be what’s damaging McDonald’s revenues, which, according to Morningstar, have been declining every year since 2013.
How can McDonald’s compete with all the new franchises selling hamburgers, fries and shakes? And how can stock analysts continue to recommend McDonald’s when sales have declined for five straight years? I own 150 shares of McDonald’s, which I bought at $66 in 2010. Should I sell this stock? — LS, Erie, Pa.
Dear LS: No!
Some of the top burger chains competing with McDonald’s are BurgerFi, Burger King, Culver’s, Steak ‘n Shake, White Castle, Shake Shack, A&W, Whataburger, Hardee’s (and Carl’s Jr.), Wendy’s, Five Guys, Krystal, Checkers (and Rally’s), In-N-Out Burger, Sonic, Big Boy, Cheeburger Cheeburger, Wimpy, Red Barn and Smashburger. The top 500 burger chains generated $76.2 billion in revenues last year, and about 35 percent of those revenues derived from McDonald’s.
I’ve hamburgered at each of the above franchises and others, and I’ve found that there are only two places in the world that make a better burger than McDonald’s. One is in East Harlem, and the other is a cafe in Kathmandu. Neither is franchised. Among the prominent reasons consumers choose McDonald’s (MCD-$185) are clever marketing, superior taste, consistent product quality, fair prices and clean service areas.
