The one that is garnering the most market share is Tim Hortons who is second in lunch-time market share and CEO Paul House says that in less than five years they can over take McDonalds in total market share in Canada. House stated that right now 8 out of every 10 cups of coffee sold in Canada come from Tim Hortons. So does that mean the fast growing Dunkin Brands may become the new Fast Food Feeder in the United States?
During the past 4 decades hamburgers drove sales and propelled the overall restaurant industry. Without a doubt the hamburger is now globally recognized as a penultimate American food. It is ready-2-eat, hand held and prepared to eat on the run; convenient, simple and affordable. Contrary to popular belief Americans do not eat hamburgers daily. There simply is not room in the minds-eye of the consumer for all of the hamburger chains in America today. The growth to dethrone the burger segment could come from the coffee sector.
McDonalds with innovative new products, continually reimaging stores and a focus on the consumer is the global leader in restaurant sales and the hamburger niche. In the United States the undercurrents of a sector in upheaval and transition is emerging for every position except number one. McDonalds is and will remain number one for many years to come.
However legacy second tier hamburger chains Wendy’s, Burger King, Sonic are circling in a quagmire of their own making. Each is trying to re-energize the halo of success they have not seen in years. Success to date has proven allusive for each in their effort to re-energizing. It is very likely that one or two of the three might very well be much smaller in five years than it is today.
One of the reasons is that there are hamburger companies on the move including Steak & Shake which is profitable once again and refocusing on growth. Then upstarts Five Guy’s, Smashburger, Fatburger are garnering market share from those legacy second tier players. The next company in the QSR niche to watch will be In-N-Out Burgers. If In-N-Out Burgers does half as well in Texas as they do in California and Nevada they will accelerate growth and watch out. One of these three; Wendy’s, Burger King or Sonic might just fade away faster than we think.
The metrics for the burger industries customer mix are in flux. Clearly some of the legacy players that focus on the franchisee more than the consumer are going to continue to lose market share too both new up-start chains and regional players that are positioned to win. I believe a shake-out in the hamburger niche is underway and a road map to the future will evolve this year. Could it be found in Coffee and doughnuts? Are you ready to bring your brand to North America? If so call us.
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