Fewer fast-food customers these days are asking “where’s the beef?”
Instead, they want healthier items, local ingredients, a gourmet touch -- and as temperatures rise, a taste of outdoor cooking.That’s why Burger King’s (BKW) summer menu this year will feature a rib sandwich clearly modeled after McDonald’s (MCD) famous McRib smashup. The item is brand new for Burger King, which plans to differentiate its pork pile by serving it on an "artisanal bun," while topping it with "sweet and tangy" barbecue sauce and "crispy bread and butter pickles." Other new items for Burger King: A barbecue chicken sandwich, Buffalo chicken strips and a variety of Oreo-flavored desserts.
The summer menu, which Burger King will offer beginning May 21, also includes a few repeat items that proved popular last summer, such as sweet-potato fries, a pulled-pork sandwich and a Carolina-style barbecue Whopper. Typical prices for the sandwiches will be $3.49, or $5.59 for a combo with fries and a soda.
Like the McRib, Burger King’s summer items will be limited-time offers, or LTOs in industry parlance, since they tend to have seasonal appeal that declines in cooler months. Fast-food chains also generally benefit from the publicity (such as, well, this story) that comes from “introducing” new menu items, even if they’re perennial favorites.
But for Burger King, the new summer menu needs to accomplish more than simply spicing up a traditional set of offerings. The fast-food business has become a cutthroat industry, mainly because diners have been cutting back and, for some chains, growth has stalled.
“The only way to grow is by stealing market share from somebody else,” says Scott Hume, editor of the blog BurgerBusiness.com, which first reported details of Burger King’s summer menu. “And you’re only going to steal share if you get noticed, if you get consumers saying, ‘that’s new, I’ll try that.’”
McDonald’s has been consistently better at rolling out innovative new menu options, including old standbys like the McRib and new items, such as McWraps and smoothies, meant to appeal to health-conscious consumers who might otherwise skip a burger chain. Since 2007, the last year before the recession, McDonald’s total sales have risen 21%. Burger King’s sales have fallen by about 12% since then.
Burger King has suffered from several ownership changes during the last decade or so, twice being purchased by private owners and twice going public. “There’s been a lot of change at the top, which makes it difficult,” says Fred LeFranc, managing director of consulting firm Results thru Strategy. “McDonald’s had a few years with some quick changes, but their culture is so strong that when new leaders took over, it was not disruptive.”
Still, even the most storied franchises these days face grueling competitive pressure as consumer tastes shift, young diners develop preferences totally different from those of their parents, and health concerns become more acute. Chains such as Subway and Chipotle (CMG) have grabbed customers by highlighting fresh, upscale ingredients and a range of healthy options. Web sites such as Healthy Dining Finder make it easier for consumers to get nutrition info on food served at chains and other restaurants near them.
Restaurant experts say it’s hard to predict whether limited-time offers such as the Burger King’s rib sandwich will boost sales, especially since competitors are typically rolling out promotions of their own at the same time. Some turn out to be big hits, such as the Doritos Locos Tacos launched by Taco Bell last year.
Others flop. When Burger King rolled out pork ribs in 2010, it ran out of product before the promotion was over, forcing it to cancel some of the commercials shot to market the ribs. McDonald’s recently cut Angus beef burgers from its menu after four years, because profits on the relatively high-priced sandwiches were thin.
One thing all fast-food chains must be careful about is cutting too much taste from their meals, whether in search of nutrition or novelty. “People still talk thin and eat fat,” says LeFranc.
That must be why burgers and fries never drop off the menu.
- Consumer Discretionary
- Food & Cooking
- Burger King