Which brands are winning the QSR wars?

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The fast food wars are heating up. If you didn’t feel the burn when Popeye’s launched its chicken sandwich this summer, you’re likely to sense it as QSRs clamor to win the battle for plant-based burger dominance. The fight for the hearts and bellies of global consumers is on, and it’s being fought across multiple fronts.

Our recently launched report, How the World Eats, dives into the fast-food consumption habits of people all over the globe. The report, based on our own real-world intelligence, focuses on five global brands: Burger King, Domino’s, KFC, McDonald’s, and Subway. We looked at visitors of 99 branded QSRs across the globe in 2019 to help marketers understand their competitor threat levels, audience loyalty, and key visit patterns in an effort to help them build a better strategic battle plan. The key takeaways from our study are:

  • High crossover: The five global QSRs we highlighted in our study all saw high rates of crossover outside their specific category. For example, KFC customers demonstrated an average of nearly 40 percent crossover with burger chains.
  • Loyalty is impacted by population density: Markets with the highest population density – the UK and Singapore – saw significantly lower levels of loyalty.
  • Variety and convenience are priorities: Consumers want more options, like new ways to order and more menu choices.

Let’s dive a little deeper into each.

Crossover:

For the majority of QSRs, their greatest competition for customer exclusivity is not always their direct competitor. Across all categories, most restaurants share customers with brands that serve completely different fare. Domino’s biggest competitor for repeat business isn’t Papa John’s necessarily; in many markets, it’s likely to be a chicken or burger place. In England, where sandwiches are the most popular takeaway food, Subway’s saw many of its customers opt for burgers, rather than heading over to popular sandwich shops like Pret A Manger or Eat.

The story is a little different for McDonald’s and Burger King. The burger giants saw more competition within their own segments than most of the other food genres. Globally, Burger King experiences 34 percent crossover within the burger segment, while McDonald’s sees 28 percent.

Overall, each brand faces a broad range of competitors that varies greatly from region to region. It’s critical to take a deep dive into the details for each geographic region to develop an appropriate and effective strategy.

Loyalty:

Loyalty, interestingly, varies tremendously as you travel the globe. The areas with the highest popularly density saw greatly reduced levels of loyalty to any one chain. In Singapore, loyalty hovers at around 26 percent; in the UK it’s about 33 percent. In contrast, Australia demonstrated 50 percent exclusivity (or loyalty to a single brand) and the US saw 57 percent. As we note in the report, we found this surprising, given the number of options Americans have across the fast food landscape, but it may be indicative of stronger brand traction brands and richer history that brands like McDonald’s and KFC have in this country.

McDonald’s and KFC’s success in the USA may present a teachable story for other countries: customers tend to be more loyal to brands that “get” them. Global brands need to understand this and tailor their communications and menu offerings to local audiences. In the US and Australia, McDonald’s and Hungry Jack’s are (respectively) already on their home turf, so they know their audiences and can speak to them with relevance and offer favorite foods throughout the day. However, in Singapore, where regional fare purchased from hawker-style franchises is popular, larger brands might do well to offer variations of these local foods.

Variety and Convenience:

In the age of Amazon, even restaurants are impacted. Consumers expect their favorite QSRs to offer online ordering, delivery, loyalty programs and more. Those shifting customer expectations have forced even giants like McDonald’s to reconsider – and quickly adapt – their digital strategies to keep pace. The world’s largest fast food company is fast-tracking innovative programs to offer their diners more personalized and convenient experiences.

At the same time, changes in both diet and attitude are keeping QSRs on their toes, as environmentally-conscious consumers demand biodegradable packaging and meat-free options. The demand for healthier and more earth-friendly products has helped fuel the growth of the plant-based meat market, as brands like Burger King and Dunkin’ add vegetarian patties to their menus.

Even with the disruption fast hitting the industry, QSRs are expected to expand 4.6 percent globally over the next two years. That’s due in part to another global trend: people are just eating out more.  Radiant Insights attributes this rapid growth to “changing lifestyle, growth in the number of quick service restaurants, growth in new infrastructures like institutes and airports, and rising demand for fast food from consumers in developing countries.” The availability of technology is also a factor in some areas: mobile apps and websites mean it’s simply easier to order food, and there’s no wait to pick it up.  Consumers can simply swipe, tap and pick up hot food that’s ready and waiting at the counter. For busy working adults (and working families), that convenience is a tremendous contributing factor.

So, which brands are winning the QSR wars? At this point, it’s hard to predict a single winner. But the brands that rely on real-world insights to understand their customers are sure to end up at the front of the pack.

Download “How the World Eats” here. For more US-specific insights, check out our US State of the Nation 2019 report here.

For a deeper dive into each of the QSR brands featured in this study, contact USSales@blis.com.

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