McDonald’s chicken sandwich
Source: McDonald’s
According to a report by Credit Suisse, McDonald’s wants to win the chicken sandwich wars with lower prices, while Burger King of Restaurant Brands International is still figuring out its strategy.
In August 2019, Popeyes, the sister chain to Burger King, started the chicken sandwich wars with the launch of its own version of the menu item. Social media users took on Chick-fil-A’s, and Popeyes’ sandwich quickly became a hit, growing double-digit sales at the same store and adding about $ 400,000 in annual sales for each location.
“We expect competition to increase in 2021 as brands in several segments increase their offerings to take a bite out of the chicken category and improve competitiveness,” Credit Suisse analyst Lauren Silberman wrote in a note on Friday.
McDonald’s is set to launch its own version on Feb. 24, and Yum Brands’ KFC is rolling out one nationwide by the end of the month. Burger King is still in the testing phase.
McDonald’s new Crispy Chicken Sandwich is undermining its main rivals, according to Silberman. The burger chain’s sandwich is priced from $ 3.49 to $ 3.69 in test markets, compared to Chick-fil-A’s $ 3.75 sandwich or Popeyes’ $ 3.99 version.
McDonald’s may have learned a lesson from its latest foray into chicken sandwiches. The Buttermilk Crispy Chicken Sandwich, first launched in 2015, was dearly priced.
Silberman estimates that restaurants in McDonald’s test markets sell an average of 125 to 150 crispy chicken sandwiches per day. If restaurants get to the top of that range when the product launches nationwide, the sandwich could increase sales in the same store by 4%, according to Silberman.
Burger King, on the other hand, still seems to be working out its pricing strategy. Silberman wrote in the note that one of its test markets is pricing the new sandwich at $ 5.29, well above its rivals. But two other test markets are pricing the sandwich at a discount, ranging from $ 3.49 to $ 3.89. In markets that don’t test the new sandwich, the burger chain usually charges more for its current chicken sandwich.
According to Credit Suisse’s data, Burger King restaurants sell an average of 60 to 75 chicken sandwiches a day to date. The new sandwich could increase sales in the same store by as much as 4% if it sells 75 sandwiches per restaurant when launched nationwide.