Reporter's Notebook
McDonald's isn't just losing business to restaurants

McDonald's isn't just losing business to restaurants

This post is part of the Reporter’s Notebook blog.

One of the biggest competitors to McDonald’s Corp. isn’t a restaurant chain.

It’s Kroger.

In a recent survey, the Chicago-based consulting firm Technomic polled customers of prepared food offerings — or retail meal solutions — at the Cincinnati-based grocery store giant. The survey asked those customers where they’d go if they didn’t get a bucket of chicken or a salad bar from the grocer.

One out of four opted for Kroger instead of a restaurant. And the restaurant they’d have eaten at otherwise was McDonald’s, and it’s not particularly close.

Of those who would go to a restaurant, 23 percent would go to McDonald’s, 11 percent said they’d go to Wendy’s, followed by Applebee’s (7 percent), Burger King (6 percent) and KFC (5 percent).

That’s not surprising. Grocery stores have improved their prepared food offerings in recent years, selling more fried chicken and deli sandwiches and salad bars and hot bars.

That’s luring more traffic away from restaurants. And QSRs tend to be the biggest donor of share to those offerings. Only one of top five chains in the Kroger survey is a casual dining concept, for instance. McDonald’s, as the world’s biggest restaurant and its biggest QSR, would thus stand to lose the largest number of customers to grocery store delis.

A Technomic survey of retail meal solutions customers at 22 different retail chains also found McDonald’s the most likely alternative. Sixteen percent said they’d go to McDonald’s, by far the most of any concept mentioned. Subway, at 9 percent, was next, followed by Wendy’s, Burger King and then Applebee’s.

Six of the 12 most mentioned concepts were QSRs.

Quick-service restaurants are convenience-oriented concepts, often destinations for people in a hurry or those performing another task, like grocery shopping. Prepared food at grocery stores is appealing to customers looking for a convenient meal, so the two would seem to be natural competitors.

Casual dining concepts aren’t immune, to be sure — Applebee’s, Chili’s and Olive Garden were all mentioned in last year’s study, for instance.

But the results of the surveys show the breadth of McDonald’s competitive set. Its customers are coming from everywhere.

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