Trouble Brewing for McDonald's: Starbucks Set to Top as Most Valuable Restaurant Chain

Starbucks may be too much of a tall order for McDonald's. While the Golden Arches have stood strong in the market since it went public in 1965 — with its value today at over $100 billion — the King of Coffee could soon be flipping the quick-service industry more than McDonald's is flipping its burgers.

On one hand, McDonald's has been fighting to find its footing with dropping sales and changing consumer demands, whereas Starbucks has been growing at least 5 percent in same-store sales worldwide almost consistently for the last two decades. Starbucks' increase in value has been exponential, so much so that it could be on its way to topping McDonald's as the most valuable restaurant chain.

"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," Mark Kalinowski, Nomura analyst renowned as one of Wall Street's best, wrote in an early January report.

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"Well beyond 2021, we would not be surprised to see Starbucks exceed the 50,000-store level," he added, with McDonald's operating just under 37,000 stores globally as of September.

Starbucks' growth pushed the brand to the second-largest chain by market cap, trailing behind McDonald's at a value of $84 billion. Naturally, investors have pitted these two household names against each other and are watching them very closely. What factors favor Starbucks' side of the ring?

With not too much direct competition aside from Dunkin' Donuts — and even McDonald's, which plans on investing millions to remodel the McCafe brand — Starbucks is rising to the top. Kalinowski also attributed "concept differentiation, consistent same-store sales, unit growth potential, and ongoing innovation" to the Seattle company's strengths. 

Still, while Ronald McDonald may be the familiar face of this fast food titan, McDonald's is no clown and doesn't plan on joking around. Both of these brands are heavy hitters. (Not surprisingly, they both ranked in Foodable's latest Top 100 Most Loved Brands report.) It would take significant, continued growth these next few years for Starbucks to pull the lead. Can McDonald's keep its champion belt or is Starbucks' takeover inevitable? Read More