McDonald's is focusing on chicken and beverages as key growth areas, aiming to increase its global market share by 1.5 percentage points in each category by 2030. CEO Chris Kempczinski highlighted the significant market sizes, noting that chicken is a $130 billion market where McDonald's holds a 20% share, and beverages represent a $230 billion market with a 10% share.
However, recent consumer spending data from Consumer Edge indicates that McDonald's faces fierce competition, particularly from chains like Chick-fil-A, which gained 0.58 percentage points of spending share among McDonald's customers in the third quarter. Other coffee chains, including 7 Brew and Starbucks, also captured additional spending, collectively adding 0.88 percentage points.
Despite being the largest chain in limited-service restaurant spending, McDonald's has seen a decline in its market share. Analysts express skepticism about the effectiveness of McDonald's new strategy, with Bernstein's Danilo Gargiulo noting that recent beverage launches have not sufficiently boosted sales and that the anticipated chicken menu items are further away than expected.
He maintains a market perform rating on McDonald's stock with a price target of $295, while shares recently closed around $235. This competitive landscape and the challenges in executing its growth strategy could pressure McDonald's near-term earnings