McDonald's Free Wi-Fi: A Potential Page Turner

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Includes: BKC, CKR, JACK, MCD, PNRA, SBUX, WEN, YUM
by: John Gordon

We see the news that McDonald's will (NYSE:MCD) offer free wi-fi in its US locations in January 2010 as a big deal and a clear, positive differentiator to its QSR peers such as Burger King (BKC), YUM, Wendys (NYSE:WEN), Jack in the Box (NASDAQ:JACK), Carls/Hardees (CKR) and and even Starbucks (NASDAQ:SBUX). McDonald's is not a coffeehouse but has recently introduced premium brews and competes at least indirectly with SBUX for share of wallet.

Anyone who follows Panera (NASDAQ:PNRA) closely and gets in their units knows the free internet coverage there is a huge draw. I find 50% plus of customers working on computers in Panera during non-peak hours. Panera is one of two chain restaurants that has grown customer traffic the last two quarters.

McDonald's will also likely get access to customer information to tailor marketing offers/preferences, or enhance its research. Sales at QSR restaurants are heavily skewed to the drive thru and even busy restaurants have fairly empty dining rooms, so capacity should not generally be a problem. In fact, people draw more people, generally.

Disclosure: No stock positions