McDonald’s Corporation (MCD), Buffalo Wild Wings (BWLD), Chipotle Mexican Grill, Inc. (CMG): Can Fast Food Take on Fast Casual?

Wendy’s Senior VP Denny Lynch says, “I promise you three, four, five years ago, we couldn’t pronounce ‘asiago,’ we certainly wouldn’t have known it was a smoked cheese that tastes great with chicken.” This is a humble admission of a need to learn and grow as a company to be competitive. In addition to asiago cheese, the chain now offers things like five-grain flatbread, smokey honey mustard, and even a pretzel bun.

Wendy’s revamped menu hasn’t hindered fast casual burger chains’ growth in the least — For example, Smashburger was founded in 2007, and has since grown to over 200 locations. But this new menu has allowed Wendy’s to surpass Burger King in sales in 2012 and become the #2 American burger chain behind McDonald’s.

Conclusion

Fast casual continues to be the hottest segment in the restaurant sector. I don’t think investors should be betting against any fast-casual chain right now. Places like Chipotle Mexican Grill, Inc. (NYSE:CMG) and Buffalo Wild Wings (NASDAQ:BWLD) are clearly scratching an itch consumers have.

When fast food imitates fast casual, fast casual isn’t affected at all. But this move does make a fast food chain more competitive against other fast food chains. Wendy’s and Taco Bell are doing a good job at this and continue reaping the benefits.

The article Can Fast Food Take on Fast Casual? originally appeared on Fool.com and is written by Jon Quast.

Jon Quast has no position in any stocks mentioned. The Motley Fool recommends Buffalo Wild Wings, Chipotle Mexican Grill, and McDonald’s. The Motley Fool owns shares of Buffalo Wild Wings, Chipotle Mexican Grill, and McDonald’s. 

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