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As we mentioned earlier this week, MCD is facing a number of issues within their control, including operational complexities, a lack of truly innovative ideas, and an unhappy franchisee base.  Outside of their control, competitors such as SONC are stepping their game up.  SONC along with other regional and super-regional QSR brands are finding innovative ways to not only drive sales now, but to continue to drive them in the future. 

SONC released its initial estimate for system-wide sales in 4Q13 today, reporting +5.9% growth in the quarter.  The company continues emphasize “21st Century Engagement” and it is this mentality that has them well positioned for the future.  Management has integrated the three most important communication platforms (television, social, and mobile) into one network, called Sonic ICE (Sonic Integrated Customer Engagement).  Sonic ICE is an integrated network driven by the data cloud that connects social platforms and communications to the company’s digital POPS (point of personalized service) platform, which is the main platform that drives the consumer experience.

The POPS unit will be installed in SONC’s drive-in stations and communicates with the consumer in three ways:

  1. Suggestive selling
  2. Offering the consumer personalized rewards based on their behavior
  3. Other brand engagement ways and content ways that they can engage the customer

With this system in place, SONC will be able to connect with the user individually, drive consumer demand toward specific items and, ultimately, drive profitability.  This is a system that franchisees are excited about and one that will enhance the customer experience.  The company will also be launching a new mobile platform in October.

WEN's stock up 4.5% today, and 54% over the past three months, is an indication of better times to come.  The bottom line — McDonald's direct competitors are getting stronger and its very apparent that MCD has fallen significantly behind the competition on new product innovation and putting technology in place that can drive incremental traffic. 

QSRs: STEPPING THEIR GAME UP - sonc

 

 

 

Howard Penney

Managing Director