In the few years leading up to 2015, McDonald’s painted the picture of a kingdom in decline. Once the pinnacle of fast food, Mickey D’s and its burger peers had lost their luster as clever competitors (Taco Bell, Dunkin’ Donuts, Chick-fil-A) and up-and-coming fast casuals (Panera, Chipotle, Shake Shack) stole market share.
But a sequence of events over the past year is finally hinting at signs of a McDonald’s turnaround, with system-wide sales enjoying a roughly $350 million boost in 2015 and three straight quarters of comp sales increases at press time. Under the direction of CEO Steve Easterbrook, McDonald’s sought to develop two major consumer trends: easy customization and all-day breakfast. The Create Your Taste kiosk program was expanded to more markets, but the latter initiative of (a curated) daylong morning menu really shook things up. Although it wasn’t rolled out until October, all-day breakfast helped McDonald’s close 2015 on a high note.
While a lawsuit filed by the National Labor Relations Board over joint employer liability has elicited mixed reactions within the industry and beyond, the Golden Arches have made a concerted effort to emphasize its responsibility as a corporate giant in other ways. Earlier this year, it brought health-halo Cutie clementines back to the menu, continued its Happy Meal Books program with a projection of reaching 50 million books by year-end, and raised pay for employees at corporate locations. All the do-good hubbub culminates this month with its Olympic Kids Program, in which 100 kids will be front and center at the opening ceremony in Rio.
There’s plenty of fight left in the fast-food giant, and no doubt that it will once again go for the gold.
Starbucks is the industry’s chief overachiever. Never one to rest on its laurels and Frappuccinos, the coffee powerhouse continued to launch fresh LTOs—Halloween-themed “Frappula,” as well as Cherry Blossom and Caramel Waffle Cone drinks—while also beefing up its less saccharine offerings. After witnessing a 20 percent uptick in its overall iced beverage sales, Starbucks introduced a new cold-bar beverage lineup just in time for summer.
Novelty beverages notwithstanding, the global brand has poured considerable energy into enhancing its adaptability to fit as many meal occasions as possible. Last fall, Starbucks kicked up its convenience factor with the nationwide rollout of Mobile Order & Pay, allowing customers to skip the line and place orders ahead of time. Playing both size extremes, it announced plans to open the second Roastery location in a 20,000-square-foot facility in New York City’s Meatpacking District while also debuting its fifth express format store at only 635 square feet.
While some of the 17 million or so customers who actively use Starbucks’ loyalty app were miffed in April when the company revised the app to award stars (credit) based on purchase amount rather than frequency, it looks like ’Bucks is betting on other perks—points for making mobile orders or using partner services like Lyft and Spotify—to keep consumers cool.
The past year was tough for Subway. Not only was former spokesman Jared Fogle imprisoned on charges of child pornography and solicitation, but also founder and fast-food pioneer Fred DeLuca died just a month after the brand celebrated its 50th anniversary. The company went into a veritable lockdown, and U.S. sales slid some $400 million.
But Subway, with its gargantuan international presence and streamlined system of sandwich artistry, is hardly down for the count. In early 2016, it launched new premium ingredients like thick-carved turkey and applewood-smoked bacon. Industry experts think this menu upgrade stands to perform best against McDonald’s all-day breakfast as other brands scurry to find their own game changer. Subway also continues to emphasize its healthfulness by working to remove undesirable ingredients like high-fructose corn syrup and artificial flavors and colors.
While the second-biggest burger brand didn’t make headlines like McDonald’s—despite its efforts to do so through a proposed “McWhopper” collaboration—Burger King did manage an impressive surge in 2015. System-wide sales moved up $900 million, and AUVs also enjoyed a boost as the company continued to cull a small number of underperforming stores. Like many brands, Burger King is touting the cleanliness of key menu items, but it is also (rather wisely) trying changes within its wheelhouse. Buffalo Chicken Fries, Grilled Dogs, and a Flame Grilled Chicken Burger might be menu innovations, but they’re not so far from the fare you’d expect at a burger joint.
By now it’s obvious that Taco Bell’s years-long success is anything but a flash in the pan. The top Mexican quick serve jumped a spot on the QSR 50 and continues to find favor among younger consumers with its tongue-in-cheek humor and zany menu options like the Quesalupa and Beefy Crunch Burrito. What’s new is its approach to ingredients. Over the past year, the company has made commitments to only source cage-free eggs and to remove artificial colors and flavors, as well as antibiotics.
The system bulked up with an additional 200 stores, but Taco Bell isn’t putting all its (cage-free) eggs in a single basket. Last year, the urban-hip Taco Bell Cantina debuted in Chicago and San Francisco, and in May the company unveiled four new upscale store designs with a special emphasis on reflecting the local community.
Usually neck and neck with Burger King, Wendy’s failed to keep up the pace and fell a spot in the rankings—but not from lack of effort. In the past year, Wendy’s has worked to update nearly every facet of its business, from founding its tech-focused 90° Lab and creating a vegetarian black bean burger to promoting CFO Todd Penegor to chief executive and teaming up with pop band American Authors for a special promo.
Couple those moves with the fact that Wendy’s AUV still outperforms the top five brands (save for McDonald’s), and the Freckled Lady might just make a rebound.
Dunkin’ is holding steady with its aggressive growth plan, totaling 1,125 new stores in just three years while pushing system-wide sales nearly $500 million in 2015. Next year it will enter Hawaii for the first time while also driving big deals in international markets like South Africa and Switzerland. And after promoting five internal managers to vice presidents, the company can be expected to stay true to its course.
Dunkin’ has also made impressive strides with its outreach; in December it became the first corporate sponsor of the newly launched National Women’s Hockey League (NWHL), and soon after became the league’s “official coffee shop.” Dunkin’ also tapped social media celebrity Logan Paul to create content for video-sharing app Vine that highlights the DD Perks rewards program.
Whoever says you can’t boost your annual sales more than $1 billion in a single year while maintaining a six-day workweek obviously has not visited Chick-fil-A.
The once-regional quick serve is spreading its wings and gliding into new territory. Its spring debut in New York City was highly anticipated and well received and the company has a dozen more locations in the pipeline for the Big Apple.
On the menu side, Chick-fil-A highlighted its healthy side by adding a new salad to the lineup and introducing a Superfood Side—kale and broccolini with dried cherries and roasted nuts—developed in collaboration with Atlanta chef Ford Fry.
While 2015 was hardly a banner year for the biggest pizza chain—average unit volumes once again slipped and the net unit count fell by more than 100—there were also hints at a course correction. From an emoji collaboration with Pepsi and a Leap Day celebration in Texas to Marvel Comics pizza boxes and off-the-cuff ads with “SNL” star Bobby Moynihan, Pizza Hut reestablished itself in the last year as a cultural touchstone.
Of course, long-term success lies in consistent initiatives, and for Pizza Hut that includes the $5 Flavor Menu, its commitment to remove preservatives and antibiotics, and those zany stuffed crusts. Stuffed garlic knot pizza crust, anyone?
Panera Bread keeps its place as the only fast casual to break into the top 10. AUVs held steady at $2.5 million while the brand added nearly 100 net stores in 2015 and opened its 2,000th domestic location in March. Panera hasn’t made any revolutionary announcements since its No-No List of banned ingredients last year, but that doesn’t mean it’s not setting lofty goals. According to a Fortune article in February, Panera expects digital sales (through its popular kiosks) to reach $1 billion by 2017.