McDonald's may soon account for more than half the fast-food hamburgers sold in America for the first time. The Golden Arches, whose menu has spread beyond burgers to include more than 100 items, tacos to oatmeal, on its menu, is gaining market share while Burger King, Wendy's and other chains lose customers.
McDonald's market share rose to 49.5%, its eighth straight annual increase, according to 2010 data from industry consultant Technomic, Chicago. Burger King fell to 13.3%, down from over 20% in the late 1990s. Wendy's fell to 12.8%, down from a peak of 14.5% in 2005. The Sonic and Jack in the Box chains were also down.
Why is McDonald's winning? Because size matters more than ever: "The McDonald’s system continues to enjoy inherent advantages of scale - for example, it spends much more on marketing than any of its burger rivals," writes Mark Kalinkowski, fast-food analyst at Janney Capital Markets.
By contrast, "we view the Burger King brand as troubled... Flame-broiling and 'Have it your way' are no nearly enough to connect with many of today’s sophisticated burger-sector consumers... McDonald’s likely will be the biggest recipient of Burger King’s market-share losses..." Wendy's is also down, but may "at least hold its market share" after its planned spin-off by Wendy's/Arby's group and could pass Burger King for the #2 ranking this year.
Among smaller chains Sonic and Jack in the Box have been losing market share. But Five Guys Burgers & Fries is growing rapidly, up more than 30% last year, Technomic says.