McDonald's chicken sandwich sales are exploding as the fast-food giant finally launches a worthy Chick-fil-A rival

• McDonald's franchisees say chicken sandwich sales are better than they expected.
• The chain's sales are above 2019 levels as demand picks back up.
• Chicken sandwiches are on track to make up 10% of sales at McDonald's.

McDonald's new chicken sandwiches are a hit.

Executives said Thursday that the three new crispy sandwiches released in February are selling "substantially more" than previous versions, confirming a trend the chain's franchisees first reported earlier this month and solidifying the Golden Arches' place in a highly competitive field.

While Chick-fil-A is widely understood as the chain to beat, KFC, Popeyes, Burger King, and even Jimmy John's have launched their own competitors in recent months. As of December 2020, Chick-fil-A still had by far the largest share of online chicken sandwiches sales at 45%. No other brand even reached 20%.

McDonald's has sold chicken sandwiches in the past, but this newest version seems to be the best so far, executives said. The sandwiches sell strongly especially after 4 p.m, and US stores are seeing historically high sales volumes.

In a survey of franchisees by Kalinowski Equity Research released April 26, about one-third said chicken sandwiches were selling above their expectations, and 57% said sales were in line with expectations. The average restaurant is selling 262 sandwiches per day, though that number is expected to go down to about 175 once McDonald's national advertising moves on from chicken sandwiches.

Still, those sales would be approximately $300,000 in annual sales per unit, making up about 10% of a franchise's annual sales: "Not too shabby for a so-called "burger chain!" Kalinowski wrote.

In March, Placer.ai found that foot traffic at McDonald's across the US was up significantly following the release of the new sandwiches, though still down from 2019 levels.

Franchisees remain optimistic about the chicken sandwiches' sales potential, though some expressed concern over what will happen when national advertising shifts away from the menu items.

"The second and third quarters are going to be great for same-store sales. Not too sure about the fourth quarter and
2022. Chicken intro advertising ends now, so we'll see how the product sales hold up" one anonymous franchisee told Kalinowski.

"Long term, the chicken products are going to be a real positive, but it'll be hard to tell with all the new and changing
elements in today's business. But I'm glad to have them" another restaurant operator wrote.

Franchisees have reason to be optimistic. US sales grew 13% over the same period in 2020, and even surpassed 2019 levels. Demand is back, in part due to US stimulus money and lifting COVID restrictions, though a looming worker shortage could cut into the gains.

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