Of the two, though, McDonald’s Corporation (NYSE:MCD) seems to have the greater chance of turning things around over the long term. Coke can make inroads abroad, and it will likely continue to acquire smaller beverage companies and put the force of its enormous distribution network behind them. But Powerade or Odwalla is never going to have the draw of The Coca-Cola Company (NYSE:KO)’s namesake brand, and, outside of advertising, the company seems to have little power to change the domestic backlash against soda. Recent studies have shown obesity declining in preschoolers, a development some credit to lower consumption of sugary drinks. If that’s the direction the country is headed in, Coke will continue to lose sales.
McDonald’s, on the other hand, will always sell burgers, fries, and Coke products, but the company has more flexibility than its beverage-making twin. The fast-food chain consistently updates its menu to keep up with industry trends, such as adding its McCafe line to compete with Starbucks or providing healthier options like salads and McWraps to offer consumers healthier choices. Recently, McDonald’s has been revamping its U.S. stores, adding TVs, Wi-Fi, and a more modern, minimalist design similar to its fast-casual cousins, giving consumers another reason to visit.
After their recent woes, I’m not sure I’d bet on either of these traditional powerhouses to beat the market, but due to its ability to change its menu items and store design, McDonald’s should have a greater chance of success than Coke.
The article Why McDonald’s Is a Better Buy Than Coke originally appeared on Fool.com and is written by Jeremy Bowman.
Fool contributor Jeremy Bowman owns shares of Chipotle Mexican Grill. The Motley Fool recommends Chipotle Mexican Grill, Coca-Cola, McDonald’s, Panera Bread, PepsiCo, and Starbucks. The Motley Fool owns shares of Chipotle Mexican Grill, McDonald’s, Panera Bread, PepsiCo, and Starbucks.
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