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Analyst Predicts Starbucks Will Pass McDonald’s

The coffeehouse chain is poised to overtake the burger chain in market value and locations within a few years.
January 6, 2017

​SEATTLE – While experiencing some drop in traffic as the overall restaurant industry recently contracted, Starbucks should be on track to pass McDonald’s in both market value and locations in a few years, Marketing Daily reports.

“We believe it is only a matter of time before Starbucks overtakes McDonald's as the largest market cap restaurant stock, although likely not in 2017,” said Mark Kalinowski, an analyst for Nomura, in a report. Currently, Starbucks has a market value of around $79 billion, compared to $98.5 billion for McDonald’s.

Starbucks has around 25,000 locations across the world, more than 2,000 new in fiscal 2016, with an additional 2,100 new locations in fiscal 2017. The company projects worldwide to open 12,000 new stores by 2021, to reach 37,000 locations. Kalinowski expects Starbucks will easily meet that goal, and “well beyond 2021, we would not be surprised to see Starbucks exceed the 50,000-store level.”

As of September 2016, McDonald’s registered 36,615 worldwide locations. The chain with the most locations, Subway, has 44,000 as of 2016.

Kalinowski pointed to Starbucks’ premium Reserve brand as a major reason for its rosy future, predicting that it would reach $3 billion in sales. That, coupled with the company’s primary driver of drinks (instead of food), has it poised to continue growing in the coming years.