Why Burger King's 3Q14 earnings were positive (Part 4 of 11)
Product relaunch and other initiatives
In the last part of this series, we learned about the new product launches at Burger King Worldwide (BKW). The product launches helped drive traffic during the quarter.
BKW also relaunched Chicken Fries. Customers requested that Chicken Fries be added to the menu again. Customers voiced their opinions on social media platforms—like Twitter (TWTR) and Facebook (FB).
Two-way digital strategy
During the quarter, Burger King relaunched Chicken Fries. The item was suspended in 2012. It had been replaced with other chicken items .
According to management, customers mentioned Chicken Fries on the internet as often as every 40 seconds. A petition was also filed on change.org to have the company bring back its Chicken Fries. All of these requests resulted in BKW relaunching the product during the quarter. However, the company’s website states that the product will be available for a limited time.
During the earnings call, BKW stated that it used the same social media channels to spread the word about the product’s comeback. The product was mentioned as many as one million times on Twitter after the ten-day launch period.
In a study conducted by Nielsen, Millennials—the population aged 18–36—ranked use of technology as their generation’s number one characteristic. This initiative may have helped Burger King get closer to Millennials.
Competitors’ initiatives on the technology front
Restaurants—like McDonald’s (MCD), Dunkin’ Brands (DNKN), and Brinker International (EAT)—have all initiated efforts to connect with Millennials. They introduced convenient technological to make payments, order food, and redeem promotional discounts.
The Consumer Discretionary Select Sector SPDR (XLY) holds several restaurant stocks. It provides investors with broad exposure to the restaurant industry.
In our 2Q14 earnings overview, we discussed that the company is changing its stores’ image. It implemented the Restaurant Excellence Visit (or REV) program.
In the next part of this series, we’ll look at how these initiatives have done so far. To learn more read “Why Burger King’s restaurant visit program is so important.”
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