Starbucks eyeing up McDonald's position as world’s most valuable restaurant chain
Starbucks could be poised to overtake McDonald’s as the world’s most valuable restaurant chain in the coming years, according to a senior Wall Street analyst.
If Starbucks achieves its growth plans it could overtake McDonald's
Last month the coffee chain, which is already the second largest US restaurant chain by market capitalisation, announced ambitious growth plans to open almost 50% more stores by 2021, a goal which may make it the first restaurant chain in decades to take the Golden Arches’ crown.
Starbucks has endured mixed fortunes as of late with shares falling 7.5% on 2015 figures and long-serving chief executive, Howard Schultz, announcing that he would be stepping down and moving to an executive chairman position.
The news impacted on the company’s stock, however restaurant industry analyst for Nomura Mark Kalinowski told the Financial Times that the drop in stock could make it significantly more attractive to investors, particularly if it maintains its steady growth.
Starbucks’ plans to expand its worldwide store count by more than 8% for the fiscal year ending in September while growing its worldwide same-store sales by 5%. Kalinowski believes that this, coupled with a lack of direct head-on competition, could see it overtake McDonald’s.
“We believe that it is only a matter of time before Starbucks overtakes McDonald’s as the largest market cap restaurant stock, although likely not in 2017,” said Kalinowski.
A key factor in Kalinowski's prediction is the fact that Starbucks has enjoyed remarkably consistent growth over a prolonged period. The company has achieved same-store sales growth of at least 5 per cent for 26 of the past 28 fiscal years and is forecast to continue that run in the current fiscal year.
The brand recently revealed that the growth will be driven by enticing more customers with new products, store formats and technology as well as expanding its cold drinks and special dietary foods.