Food Chain Battle: Chipotle Mexican Grill, Inc. (CMG) vs. McDonald’s Corporation (MCD)

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Chipotle Mexican Grill, Inc. (NYSE:CMG) and McDonald’s Corporation (NYSE:MCD) according to ‘Mad Money’ analyst Jim Cramer on CNBC  are statement stocks that portray what people want to eat and what investors want to buy. McDonalds, according to Cramer, posted second-quarter results that were dismal seen by the fact that its stock consequently sunk in the market.

McDonald's Corporation

Customers around the world have been rebelling against McDonald’s Corporation (NYSE:MCD) cheap non-organic foods which they claim are not healthy. “Today McDonald’s put up some numbers that quite frankly were dismal, and they caused the stock to drop a buck twenty-eight on a very big update. It is so clear to everyone, but may be not to McDonalds, its customers around the world are rebelling against cheap non-natural non-organic food,” said Cramer. McDonald’s poor numbers are not only for domestic markets but also for international markets where people are opting to go natural in their diets.

Chipotle Mexican Grill, Inc. (NYSE:CMG), on the other hand, is the opposite of its one-time parent McDonald’s Corporation (NYSE:MCD), having posted a 17% increase in same store sales as well as a surge of 12% in the market after posting gigantic second-quarter earnings. The main drive behind Chipotle as opposed to McDonald has been its natural organic line of products that are relatively expensive.

McDonald’s Corporation’s (NYSE:MCD) biggest problem according to Cramer is the fact that it does not have enough customers compared to Chipotle Mexican Grill, Inc. (NYSE:CMG) which is struggling with increased customer traffic into its stores. Cramer said:

“It is natural and organic and is relatively expensive, at McDonalds the biggest problem is that they don’t have enough customers. Chipotle biggest problem is too many customers.”

McDonald’s Corporation (NYSE:MCD) expenses are also high considering the company consumes too much money on luring customers into its stores. This is opposed to Chipotle that spends next to nothing, doing clever commercials online to lure customers. The bottom line is that Chipotle Mexican Grill, Inc. (NYSE:CMG) has a huge growth potential at the back of its natural and organic products as opposed to McDonalds and the Coca-Cola Company (NYSE:KO) which are relying on manufactured growth, Cramer added.

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