What is in this article?:
- Burger King reaps benefits of refranchising
- Keeping 'less is more' menu strategy in 2014
The move allows the brand to focus more on its image, menu and messaging in 2014, according to executives.
Keeping 'less is more' menu strategy in 2014
Officials noted that Burger King’s domestic same-store sales improved sequentially every quarter in 2013, finishing at a 0.9-percent decrease for the year after rising 0.2 percent during the Dec. 31-ended fourth quarter.
“However,” Macedo said, “comparable-sales growth during the fourth quarter was negatively impacted by stronger competitive pressure and severe winter weather across the U.S. in late November and throughout December. Although we don’t like to blame weather for softness in comps, we have seen this headwind persist in 2014.”
The chain will seek to drive sales and traffic through the menu, continuing a previously stated strategy to execute “fewer, more impactful product launches.” Those new items not only have to appeal to customers, but they also must improve profit margins for Burger King’s franchise operators, chief executive Daniel Schwartz said.
“Franchisee profitability is still not the level where we would like it to be, but we’re working diligently to produce operationally simple products that drive traffic and maximize gross profit for our franchisees,” Schwartz said, citing the brand’s most recent limited-time offer, the Big King sandwich, as an example. “This new product is not only driving sales and traffic for our restaurants, but it adds minimal operational complexity in our kitchen.”
The Big King was one of only two new products launched in the fourth quarter, Macedo noted, along with the BBQ Rib sandwich, the first pork option to be included in the chain’s value menu. Subsequent to the end of the fourth quarter, Burger King launched the Spicy Original Chicken sandwich.
“Finally, our fourth-quarter results included a full quarter of Satis-fries, our first-of-a-kind, better-for-you French fry that we launched in late September,” Macedo said. “Satis-fries continue to drive traffic and are incremental to our classic French-fry purchases. They also differentiate the Burger King brand as a true innovator in the QSR industry.”
Burger King will continue to look for openings in underserved parts of its menu this year, such as breakfast and chicken, he added.
“The overall message for innovation after we made the adjustments toward the middle of last year was the focus on fewer, more impactful launches, and we’ve had a lot of success already,” he said. “We’re optimistic about things we have in the pipeline.”
At the close of the 2013 fiscal year, Burger King had 13,667 restaurants in the United States and 96 foreign markets.