This post is part of the On the Margin blog.
For much of the past couple of years, the big three burger chains McDonald’s Corp., The Wendy’s Company Inc., and Burger King have all fought for a shrinking piece of the pie.
Fast-casual chains and aggressive quick-service brands all grabbed share from the giants.
But it appears that those big three burger chains grabbed some of that share back in the fourth quarter, thanks to all-day breakfast, $4 value meals and black-bun burgers.
McDonald’s same-store sales rose 5.7 percent. Wendy’s said its same-store sales rose 4.8 percent. And Burger King’s same-store sales rose 2.8 percent in the U.S. and Canada.
McDonald’s same-store sales came largely from its decision to finally start selling breakfast items after 10:30. At Wendy’s, long known for its premium meals, a value bundle offering a Jr. Bacon Cheeseburger, chicken nuggets, fries and a drink for $4 resonated with consumers.
Burger King generated sales with new versions of its Chicken Fries and its Halloween Whopper with a black bun in October.
The success of these chains was clearly demonstrated in January, when CKE Restaurants added a $4 Real Deal, as did Burger King, with a 5-for-$4 deal.
But on Wednesday, Jack in the Box provided the first indication that it’s losing market share to these chains, when it reported a 1.4-percent same-store sales increase in the quarter ended Jan. 17.
That was disappointing, CEO Lenny Comma said, and he blamed the problem squarely on McDonald’s and the discounting. “We believe a competitor’s messaging around its launch of all-day breakfast had some impact on our results,” he said in the company’s earnings release.
Comma’s acknowledgement is in contrast to his comments back in November, when he told investors that, “There is not a big level of concern about McDonald’s competing with us in this way.” Jack in the Box sells all-day breakfast. McDonald’s joining that fray would clearly be a threat to that business.
Investors were none too happy, either: The stock lost 20 percent of its value at one point in off-hours trading.
Nevertheless, the improvement by the three big burger chains as well as Sonic, where same-store sales rose 5.3 percent in the three months ended Nov. 30, demonstrates that the sector can still add share — without simply taking it from one another.