Friday, May 06, 2011

Ronald, Jared & the Mermaid?

Last week it was announced that Starbucks was successful again.

The past few years we have seen a change in consumer spending habits and some companies adjusted while others died.

On a personal note, my wife switched from Starbucks to McDonalds for her daily coffee consuption. She was motivated by price.

I have actually increased my Starbucks visits in the past year. Why? It wasn't the coffee, but the wifi service. There used to be a couple of local shops near my office that I would give my money to for a cup of java and free internet service. Problem was they went out of business or their internet was not always working.

Meanwhile Starbucks switched over to free wifi and now they get some of my coffee cash, along with a couple other locally owned coffee shops.

Over the past couple years, I've been scolding Starbucks for the way they were doing business and it turns out even though they've made plenty of mistakes, they are healthy again.

Number 3 on this list from

Starbucks Becomes No. 3 U.S. Chain, Passing Burger King and Wendy's

McDonald's Is No. 1, Subway No. 2, as Burger-and-Fry Perennials Slip on Restaurant List Despite Heavy Ad Spending

Starbucks, just a few years ago a flailing company closing hundreds of locations, has become the No. 3 restaurant chain in the nation, surpassing Wendy's and Burger King, according to Technomic's recently released 2011 Top 500 Chain Restaurant Report.

For years the top three chains in the U.S. were burger-and-fry heavyweights McDonald's, Burger King and Wendy's. Now Starbucks is surpassed only by McDonald's and No. 2 Subway.

According to the report, Technomic estimates that Starbucks posted about $9.07 billion in U.S. sales, up 8.7% from the prior year, giving the coffee giant 57.2% share in the coffee and other beverage category.

McDonald's, perennially No. 1 in U.S. sales, had about $32.4 billion in U.S. sales in 2010. Subway, despite having about 9,000 more locations in the U.S. than McDonald's, had about $10.6 billion in U.S. sales, according to the report.

Top 10 U.S. Restaurants, per Technomic
  1. McDonald's
  2. Subway
  3. Starbucks
  4. Burger King
  5. Wendy's
  6. Taco Bell
  7. Dunkin' Donuts
  8. Pizza Hut
  9. KFC
  10. Sonic Drive-ins

Burger King, on top of recent marketing-management and ownership changes, as well as being on the lookout for a new agency since it announced it was splitting with CP&B after a seven-year relationship, is facing a sales slump. According to Technomic, Burger King, No. 4 on the top 500 list, had about $8.7 billion in U.S. sales, down 2.2% from 2009. In terms of the hamburger category, as well as restaurant chains overall, Burger King could potentially lose to No. 5 restaurant Wendy's, a chain nipping at Burger King's heels with $8.3 billion in U.S. sales, according to Technomic.

In last year's top 500, which ranked chains by 2009 U.S. sales, McDonald's was No. 1 with $31 billion, Subway was No. 2 with $10 billion, Burger King was No. 3 with $8.9 billion, Wendy's was No. 4 with about $8.4 billion and Starbucks was No. 5 with just more than $8.3 billion.

Starbucks last year aggressively upped it measured media ad spending, according to Kantar, doubling it to $94.4 million, up from $47 million in 2009. Still, it doesn't come close to the measured media spending of Wendy's and Burger King. Wendy's in 2010 spent $283.4 million, down from $293.4 million in 2009, according to Kantar. Burger King, pulling back over the years on its outlay, shelled out about $301 million on domestic measured media in 2010, down from $308 million in 2009 and $327 million in 2008. McDonald's spent about $887.8 million on U.S. measured media spending in 2010, up from $872.8 million in 2010.

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