The contest for burger dominance: McDonald’s, Wendy’s, and Burger King
The fast-food burger scene in the U.S. has historically been controlled by McDonald’s, Wendy’s, and Burger King, as these three giants compete for dominance. McDonald’s has persistently occupied the leading position, bolstered by vigorous marketing, operational prowess, and an extensive international presence. In 2023, McDonald’s declared U.S. systemwide sales of .1 billion, a figure that surpasses its rivals significantly.
Wendy’s and Burger King are in a continuous tussle for the No. 2 slot. Wendy’s seized the second position from Burger King in 2012, only for Burger King to briefly reclaim it three years later. Currently, in 2023, Wendy’s maintains the second spot with .2 billion in U.S. sales, while Burger King lags with .9 billion. Sonic and Jack in the Box complete the top five, boasting .5 billion and .4 billion in sales, respectively.
Though McDonald’s leads in revenue, it doesn’t invariably come out ahead in taste. A recent taste test conducted in August included McDonald’s, Wendy’s, Burger King, Five Guys, and regional favorites In-N-Out and Habit, revealing Habit’s Double Char as the highest-rated burger. In-N-Out’s Double-Double and Five Guys’ Bacon Cheeseburger closely followed. McDonald’s Big Mac and Burger King’s Whopper were given honorable mentions, but Wendy’s did not make the list at all.
While taste tests might not always correlate with sales numbers, they do emphasize the evolving preferences of consumers, especially in a market where regional chains like In-N-Out and Habit are gaining popularity. Nevertheless, McDonald’s continues to utilize its scale and brand equity to uphold its lead, while Wendy’s and Burger King remain in tight competition for second place.
Wendy’s planned closures and growth strategies
Wendy’s has been undertaking strategic efforts to refine its operations and enhance profitability, particularly through the closure of underperforming outlets. To boost its financial robustness, the company disclosed intentions to close 140 locations by the conclusion of 2024. These closures will focus on sites generating less than .1 million in yearly revenue, a strategy that Wendy’s CEO Kirk Tanner believes will improve the overall vitality of the business. CFO Gunther Plostch supported this view, indicating that these closures would counterbalance new restaurant openings, leading to stable net unit growth for the company.
Despite these store closures, Wendy’s is dedicated to expanding its global presence. The chain aims to inaugurate between 250 and 300 new locations around the world in 2024, with a notable emphasis on international markets. About 70% of these new units are expected to be situated outside the U.S., while the remaining 30% will be domestic. This international expansion is part of Wendy’s larger strategy to diversify its income sources and diminish its dependence on the fiercely competitive U.S. market.
By the end of 2024, Wendy’s anticipates adding over 500 new restaurants globally within a two-year span. This growth occurs alongside the company’s ongoing efforts to close underperforming sites, having already shut down 111 locations during the first three quarters of 2023. Among these closures, 78 were franchised units, and six were corporate-owned, all located in the U.S. The shutdowns are indicative of a larger trend in the fast-food industry, where chains increasingly emphasize operational efficiency and profitability over mere unit growth.
Wendy’s is not the only chain confronting challenging decisions concerning its store network. Casual dining establishment Denny’s, for example, has also revealed plans to close 150 restaurants, with 50 set to be shut by the end of 2024 and another 100 by the conclusion of 2025. These actions reflect a growing awareness among restaurant operators that sustaining a considerable number of underperforming locations can hinder profitability, particularly in a landscape where consumer preferences are evolving and competition is heightening.
