McDonald’s is shaping up to be a formidable competitor as the U.S. chicken wars intensify.
The fast-food giant’s Crispy Chicken Sandwich, which is being tested in Tennessee and Texas, is expected to up the pressure on poultry, potentially giving Chick-fil-A, Popeyes, a unit of Restaurant Brands International, and KFC, owned by Yum! Brands, some fresh competition, according to research firm Telsey Advisory Group.
Despite mixed reviews from consumers, Telsey Advisory Group managing director and McDonald’s analyst Bob Derrington told FOX Business’ Stuart Varney that, overall, the product should "be a very good success for the company," and is likely to have a positive impact on its stock price.
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|QSR||RESTAURANT BRANDS INTERNATIONAL INC.||57.19||-0.57||-0.99%|
Additionally, in a research note out last week, Derrington and the Telsey team said, “Ultimately, we believe [McDonald’s] new Crispy Chicken Sandwich and Biscuit will usher in a successful new U.S. lineup of better-quality chicken in 2020 and 2021.”
The chain is testing out its version of the chicken sandwich in the two Southern states through Jan. 26, a McDonald’s spokeswoman told FOX Business. It includes a fried chicken patty served on a sweet, buttery potato roll and topped with butter and crinkle-cut pickles; a Deluxe Crispy Chicken Sandwich version will feature lettuce, tomatoes and mayo.
After testing the products, analysts concluded the new sandwich was juicier, more flavorful and an upgrade from the more heavily battered Buttermilk Crispy Chicken.
The sandwich, which is said to replicate aspects of its competitors, comes as chains across the industry are garnering social media buzz over the so-called chicken wars. The chicken marketplace is showing rapid growth with Chick-fil-A alone posting a sales gain of 14 percent this year with $4.5 million per store, analysts say.
With massive industry growth, McDonald’s has been “clamoring for an upgraded chicken product” that could effectively compete with rivals.
“I think what Popeyes did this past August was kind of a shot across the bow to the entire industry,” Derrington said. “I think all of the competitors realized we'd better get with it or we may get left in the dust.”
The sandwich is undercutting competitors with a price point of $3.49. Chick-fil-A’s sandwich goes for $3.79 while the Popeyes equivalent costs $3.99.
“We believe McDonald’s new Crispy Chicken product is almost 'ready for primetime”' and will successfully face off against its major nemesis, Chick-fil-A, analysts said.
FOX Business' inquiries to Chick-fil-A and Popeyes were not immediately returned.
This story, originally published on 12/6/19, has been updated to include comments from Telsey Advisory Group managing director and McDonald’s analyst Bob Derrington.