Mc Donald s and Burger King logo
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By Venessa Wong

McDonald's (MCD) may recently have struggled to lure customers, but it still does far more business at each location than rival burger chains. The average McDonald's restaurant in the U.S. drew $2.6 million in revenue last year. Average sales for No. 2 chain Burger King (BKW): $1.2 million, according to data from its largest franchisee, Carrols Restaurant Group (TAST).

What accounts for this more-than-a-million gap? "Everything from marketing and site selection to product initiatives and franchisee selection have been historical factors," said Nick Setyan, vice president in charge of equity research at Wedbush Securities, in an email. Here are four factors that drive higher sales volumes at McDonald's:

1. McDonald's gets more customers during off-peak hours. Look no further than the strength of its breakfast business relative that of Burger King, says Darren Tristano, executive vice president at restaurant consultancy Technomic. Egg McMuffin is part of the fast-food vocabulary in a way Burger King can't match. And beverage and snack offerings such as McCafe and wraps have helped increase McDonald's sales between meals. The dramatic impact from off-peak business explains why chains such as Taco Bell (YUM) are entering the battle for morning customers, while others such as Starbucks (SBUX) are seeking more afternoon and evening business.

2. The power of the Happy Meal. McDonald's has the largest share of kids meal sales in the fast-food industry and gets about 10 percent of total sales from Happy Meals,
the most commonly advertised child-oriented fast-food item on television. Burger King, meanwhile, is still trying to win back "parties with kids and seniors and women," said Josh Kobza, Burger King's chief financial officer, at a conference last year. One way to do that: "We got rid of the creepy king character that tended to scare away women and children."

3. McDonald's has an edge on efficiency. Despite recent operational challenges at McDonald's, which have slowed down service, it is still more efficient. Its drive-through service can handle more cars at peak times, Tristano says, and McDonald's restaurants are adding a third service window to get customers through even faster. The average service time at McDonald's drive-throughs is 189.49 seconds, compared to 198.48 at Burger King, according to QSR Magazine. Drive-through service is important: Burger King franchisee Carrols gets 65 percent of its sales from the drive-through.

4. More marketing dollars. McDonald's spends a lot more on marketing than competitors, as Tristano points out. Its advertising costs in 2012 were $787.5 million vs. Burger King's $48.3 million, and the gap widened last year when Burger King itself spent only a few million on advertising in order to focus on equipment updates. In its 10-K submission, Burger King said it expects to spend less on advertising until 2016; the company declined to comment for this story.

-Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.


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english language

Mcdonalds food is just nasty. I have never understood why people would rather eat there, than almost anywhere else

April 04 2014 at 5:25 PM Report abuse rate up rate down Reply
denniswpb

I like the Whopper burger, but absolutely hate their fries! They changed their fries somewhere back about 10 years ago and ever since, I stopped going to BK. If they would switch to natural cut fries like 5-Guys, they would win back a lot of customers. Another thing is they need to get their franchise locations to update their restaurants. Some look like they haven't done anything to them in 20 years.

April 04 2014 at 2:14 PM Report abuse rate up rate down Reply
chgoflguy

McDonald's sucks- It's all old food stored in little drawers and when a food item is ordered they take it out of storage and assemble it and NUKE it so hot you can't touch it. Serve it to you in 189.49 sec or less by the very cute and sexy Mrs. Salmonella, who will visit you later that day!

March 31 2014 at 10:44 AM Report abuse rate up rate down Reply
Michael

McDonalds burgers are better, but Burger King's chicken sandwiches are the best. The little crispy ones not the big nasty tasting ones on the long bun.

March 29 2014 at 4:22 PM Report abuse rate up rate down Reply
JOHNNY BRAVO

yeah but the latest news is that Ronald McDonald killed burger king over that girl called Wendy,,,,yeah they found her by the subway,, its all over Kentucky fried chicken network

March 29 2014 at 4:11 PM Report abuse rate up rate down Reply
JESOPH

I don't care much for the burgers and fries at either place. But I'd walk a mile(and I usually do, any morning it isn't raining) for a Sausage Egg McMuffin, Oatmeal, and McDonald's Premium Roast Coffee.
Last I heard(from a BK employee) the King of Flame Broiling deep-fried their sausage, and served Seattle's Worst coffee. Otherwise, I'd consider giving them a chance.

March 29 2014 at 3:15 PM Report abuse rate up rate down Reply
blackcoffeeparty

One reason that BK is falling behind McD's is the stupid moves made by the corporate wienies that decided that a thin, tasteless chicken patty on a biscuit is better than the wonderful filet you used to get on the breakfast biscuit. For that reason I will not go to burger king again. As for burgers. Sonic is better than burger king and lots better than McD's. And for a chicken sandwich, Wendys is the best

March 29 2014 at 2:43 PM Report abuse +1 rate up rate down Reply
Phil

mcds is good but burger king burgers are better, although cookout is taking all the business on midlothian turnpike in chesterfield virginia and the new krispy kreme

March 29 2014 at 10:53 AM Report abuse rate up rate down Reply
Richard

The burgers, fries and ice cream are better at Burger King but the drive thru is MUCH slower than McDonalds. At least twice as long.

March 28 2014 at 3:25 PM Report abuse rate up rate down Reply
barryyost

who cares????

March 28 2014 at 11:44 AM Report abuse rate up rate down Reply