McDonald’s chicken sandwich
Source: McDonald’s
McDonald’s wants to win the chicken sandwich wars with lower prices, while Restaurant Brands International’s Burger King is still figuring out its strategy, according to a Credit Suisse report.
In August 2019, Burger King’s sister chain Popeyes started the Chicken Sandwich Wars with the release of its own version of the menu item. Social media users faced those from Chick-fil-A, and Popeyes ’sandwich quickly became a hit, driving double-digit sales growth in the same store and adding up to annual sales of ‘about $ 400,000 for each location.
“We expect competition to warm up in 2021 as brands in various segments raise their bids to take a bite out of the chicken category and improve their competitive positioning,” Credit Suisse analyst Lauren Silberman wrote in a note friday.
McDonald’s is set to release its own version on February 24, and Kum of Yum Brands will release one nationwide later this month. Burger King is still in testing.
According to Silberman, McDonald’s new crispy chicken sandwich is subduing its main rivals. The burger chain sandwich is priced at $ 3.49 to $ 3.69 in the test markets, compared to the $ 3.75 Chick-fil-A sandwich or version 3, $ 99 Popeyes.
McDonald’s may have learned a lesson from his latest foray into chicken sandwiches. Her crispy chicken breast milk sandwich, which was first launched in 2015, had a great price.
Silberman estimates that restaurants in McDonald’s tasting markets sell an average of 125 to 150 crispy chicken sandwiches a day. If restaurants reach the upper end of that range when the item is launched nationwide, the sandwich could increase sales of the company’s same store by 4%, according to Silberman.
Burger King, on the other hand, seems to be still working out its pricing strategy. Silberman wrote in the note that one of his test markets is setting the price of the new sandwich at $ 5.29, well above its rivals. But two other test markets have a sandwich discount, ranging from $ 3.49 to $ 3.89. In markets that are not trying the new sandwich, the burger chain usually charges more for its current chicken sandwich.
To date, Burger King restaurants sell an average of 60 to 75 chicken sandwiches a day, according to Credit Suisse data. The new sandwich could increase in-store sales by up to 4% if it sells 75 sandwiches per restaurant when it is launched nationwide.