Special Report | August 2012 | By Sam Oches
The QSR 50
1 McDonald’s rank last year: 1
Once again the Golden Arches reigns supreme, having added nearly $2 billion to its final domestic sales tally over the previous year (and nearly tripling the sales of its closest competitor). A range of menu LTOs, like the Chipotle BBQ Angus Burger and the Peppermint Mocha and Hot Chocolate beverages, attracted customers, but its good press in the kids’ space didn’t hurt. In July, McDonald’s announced that it would include a portion of apples in every Happy Meal and decrease the size of kids’ fries from 2.4 ounces to 1.1 ounces. The new McDonald’s Channel in hundreds of units, a new ad campaign focused on transparency, and a Hiring Day that brought on 62,000 new team members further proved in 2011 that McDonald’s is the restaurant industry’s standard-bearer.
In 2012, the innovation ante has been upped even more. Chicken McBites and the Extra Value Menu provide additional meal occasions for customers, while McDonald’s all-in approach to the London Olympics—including the kid-centered “Champions of Play” initiative—put it in the global spotlight for months. That’s good news for Don Thompson, the youthful former president of McDonald’s who succeeded Jim Skinner as CEO in June.
2 Subway ( 2 )
Subway continued to blow away the competition in net new units, gaining a whopping 872 stores in 2011 and building on its position as the largest fast-food brand by units in the world. The year saw Subway homing in on two big buzzwords quick-serve customers are increasingly hoping to hear: healthy and green. The company further developed its nutritional initiatives, with calcium- and vitamin D–fortified bread, mass sodium reductions, and healthy-eating tips on its website. It also debuted five eco-conscious restaurants, with green elements like solar panels and low-flow faucets and toilets. Subway doubled down on its focus on sustainability in 2012 while also growing the presence of its Subway Café coffeehouse-style prototype.
There’s still no word, however, on whether the company will repeat the popular $2 6-inch-sub deal, which wowed customers in December.
3 Starbucks ( 5 )
McDonald’s treading on Starbucks’ position as the beverage category leader might have spurred the java giant into doing some menu diversification of its own. The company reaffirmed its commitment to the lunch daypart with its Bistro Boxes (which offer everything from Chicken and Hummus to Salumi and Cheese), while also diving deeper into the evening daypart with the Petites line of desserts and the expanded test of units that served beer, wine, and small plates of food. This year’s purchase of La Boulange Bakery further proved Starbucks’ commitment to food.
Starbucks didn’t forget its beverage roots, though; the last year found it hunkering down on its VIA instant blends and single-cup offers (like the K-cup), rolling out the lighter Blonde roast, and purchasing the Evolution Fresh brand, which positions it as the leader in the growing juice category.
4 Wendy’s ( 4 )
After shedding the weight of sister brand Arby’s, which sold to Roark Capital Group for a cool $430 million, and consolidating its headquarters in its hometown of Dublin, Ohio, Wendy’s set out to reclaim its position in the upper echelon of burger brands.
New CEO Emil Brolick declared that the company would compete with fast-casual concepts like Five Guys, and that the path there would include a staff reboot (holding on to only “five-star employees”); low-cost, premium burgers (like the W and the Dave’s Hot N Juicy); and a company facelift (remodeling old and building new stores that include free WiFi, bright colors, and more comfortable seating).
Meanwhile, a host of new side options and a refocused advertising campaign in 2012 continued to push Wendy’s as the authentic, traditional brand Dave Thomas always intended it to be.
5 Burger King ( 3 )
As if Burger King’s major menu development in 2010 wasn’t enough, new owners 3G Capital and a fresh team of executives decided to push the envelope even further in 2011. The concept introduced several new burger options, including the Toppers, Stackers, and Chef’s Choice lines, as well as new dessert items (soft-serve ice cream, sundaes, and milkshakes) and a new breakfast dish (oatmeal). The company also hired a different advertising agency, which ditched the creepy King. Burger King even refreshed its fries recipe, toyed with its Whopper (debuting the California Whopper), and became the biggest quick serve on the inaugural list of the National Restaurant Association’s Kids LiveWell program.
But losing its position as the No. 2 burger brand must have stung more than anyone could imagine; in 2012, Burger King overhauled its menu again, introducing 10 new items that included wraps, smoothies, and salads. Even the star-studded commercials debuting the new menu couldn’t hide its similarities to McDonald’s last decade of innovation.
Do It for the Kids
QSR 50 brands that committed to healthier kids’ meals
- Burger King*
- Domino’s Pizza
- Jack in the Box
- El Pollo Loco*
- Boston Market*
*Kids LiveWell member
6 Taco Bell ( 6 )
Though Taco Bell’s 2011 started off on shaky ground with a frivolous lawsuit claiming its beef contained only 36 percent actual beef, the brand came clawing back. After the lawsuit was dropped, Taco Bell went so far as publicly demanding an apology from the attorneys who filed the lawsuit and thanking fans for the support by giving away millions of free tacos on Facebook. The lawsuit hiccup also didn’t deter Taco Bell from making big menu moves, like testing the Firstmeal breakfast menu and introducing the wildly popular Doritos Locos Tacos. The new menu direction helped reaffirm Taco Bell’s new marketing tagline: “Live Más.”
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