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McDonald's is still the big cheese, but "arch" rivals Burger King and Wendy's have beefed up their marketing efforts and are no longer viewed as small fries of the burger biz.
With more than 21,000 restaurants that earned nearly $32 billion in sales around the globe last year, McDonald's clearly remains the nation's and world's largest chain of fast-food burger joints.
In a study for Marketing News by Market Facts, Arlington Heights, Ill., McDonald's came in last when consumers were asked to name their favorite fast-food restaurant In the study of 1,004 consumers, 37.2% chose Wendy's, 31.2% picked Burger King, and 23.1% named the Golden Arches as their five.
Yet there are signs that the luster of those Golden Arches is fading slightly.
Although domestic sales rose 3%, to $16.4 billion, last year, McDonald's acknowledged that the gain was due solely to new restaurant openings. Not even the much-hyped Arch Deluxe line of pricier sandwiches "with a grown-up taste" was able to break the slump in same-store sales.
"Response to the Deluxe line is far less that what they expected and what they needed," said Ron Paul, president of Technomic, a restaurant consulting firm in Chicago. "It's not the breakthrough product they had hoped for."
Now, in a rather radical departure from the Arch Deluxe strategy of seeking higher prices, McDonald's launched its largest discounting program ever. The first phase of the so-called "Campaign 55" hit April 4, offering any of the chain's four breakfast sandwiches for 55[cents] when purchased with hash browns and a drink.
The move prompted much talk of the industry's price wars sinking to new lows, but Paul called the claim a "dramatic exaggeration." Burger King and Wendy's both have 99 offerings and have vowed they won't be goaded into a price war.
Paul predicted the two chains will pump up promotion of those items and try to counter the McDonald's push with a "truth in advertising message, pointing out that consumer's can't really buy anything for 55. They have to buy other products."
According to Technomic, McDonald's still dominates with 42.1% of the U.S. market, but Burger King's share jumped 9.2% last year to reach a 19.2% share, and Wendy's gained 6.4% to reach 11%.
"McDonald's has more locations...