BREAKING NEWS Gov. Holcomb: Indiana to move to stage five of 'Back on Track' plan Full Story

How Burger King fell behind

Burger King wants to move into the future, but it's still stuck in the past.The fast food chain's par...

Posted: Nov 13, 2018 12:09 PM
Updated: Nov 13, 2018 12:09 PM

Burger King wants to move into the future, but it's still stuck in the past.

The fast food chain's parent company, Restaurant Brands International (QSR), said last month that it plans to modernize Burger King's locations across the country in a plan it calls "Burger King of Tomorrow."

Burger King Worldwide Inc

Companies

Business and industry sectors

Business, economy and trade

Fast food

Food and beverage industry

Food and drink

Restaurant and food service industry

Restaurant industry

Restaurants

McDonald's Corp

Continents and regions

North America

Restaurant Brands

The Americas

United States

Company activities and management

Sales and selling

Sales figures

Company structure and ownership

Marketing and advertising

Despite the project's name, Burger King's efforts are nothing new. The updated restaurants will feature self-order kiosks and sleeker restaurants — changes Burger King's competitors started making years ago. While its competitors were upgrading their stores, Burger King focused on marketing campaigns and menu items.

Burger King's new restaurants will feature open kitchens, double drive-thru lanes and outdoor digital menu boards. The burger chain hopes the changes will convince American consumers to order Burger King meals more often and spend more money at the store.

The plan is a move in the right direction, said Morningstar analyst R.J. Hottovy. It's important for Burger King to focus on increasing convenience. But the brand is "playing catch-up here," he said.

Gimmicks and ads

Until its modernization plan, Burger King had been pushing gimmicky products, including a Halloween burger that gives you nightmares. It also weighed in on political topics with stunts like a "chick tax" on chicken fries in pink packaging, designed to call attention to the so-called pink tax on women's products, and a Whopper "fast lane" that sought to explain net neutrality.

"They've really focused a lot on marketing, product development and menu innovation," said Neil Saunders, managing director at GlobalData Retail..

"They're very good at coming up with the one-off menu innovations," he added. "That drives traffic."

But it hasn't been enough. In the first quarter of this year, Burger King's parent company Restaurant Brands International (QSR) reported that it was pleased with the burger chain's momentum. "Our BK comparable sales results this quarter were driven by notable strength in the U.S.," Restaurant Brand's CEO Daniel Schwartz said at the time.

Since then momentum has slowed. In the second quarter the company said US comparable sales increased by 1.8%, and in the third quarter that figure slipped 0.7%. Same-store US sales rose by 2.4% in the third quarter at McDonald's. At Wendy's sales for that period also slipped, by 0.2%.

Those competitors put their upgrade plans in motion long ago.

Strong competition

Over the summer, McDonald's (MCD) announced a $6 billion investment toward modernizing most of its US restaurants by 2020. The McDonald's redesign also includes digital menu boards and self-order kiosks.

It's important for quick-service restaurants to update their stores to maximize convenience, Hottovy said. But it can take years for chains to get all of their franchises on the same page.

McDonald's is in a unique position, said Oches, because franchisers trust the company to deliver results.

"New store prototypes, remodels ... those things are expensive," Oches said. It's easier for a brand like McDonald's to convince franchises to spend that money. For others, it's more of a struggle.

Wendy's has spent the better part of a decade upgrading its stores to include lounge seating, digital menu boards and Wi-Fi. The company said this month that it's remodeled nearly half of its stores. Wendy's is also thinking about other improvements to stores: Last year the company announced a new series of smart design restaurants that use less energy than its traditional stores.

Burger King may have also struggled because unlike Wendy's (WEN) and McDonald's, it's part of a holding company.

Burger King and Tim Hortons merged in 2014 to form Restaurant Brands, which snapped up Popeye's last year.

"When you become this enormous multi-brand holding company ... [it's] hard to focus on details," said Sam Oches, editorial director of Food News Media at QSR magazine.

Catching up

To regain its footing, Burger King needs to increase traffic to stores and boost how much customers spend on regular orders.

"Regular trade is the bread and butter," said Saunders. "The marketing and the seasonal occasions are much less important."

Burger King is still in the early stages of the project, Schwartz noted in October, adding that there are already pilot restaurants operating in Miami.

"To refresh a store, that takes a long time," said Oches. "So the fact that we're still at the very early stages of this tells me that they have a long road."

West Lafayette
Clear
74° wxIcon
Hi: 77° Lo: 53°
Feels Like: 74°
Kokomo
Clear
75° wxIcon
Hi: 75° Lo: 52°
Feels Like: 75°
Rensselaer
Clear
73° wxIcon
Hi: 77° Lo: 50°
Feels Like: 73°
Fowler
Clear
73° wxIcon
Hi: 75° Lo: 51°
Feels Like: 73°
Williamsport
Clear
73° wxIcon
Hi: 76° Lo: 52°
Feels Like: 73°
Crawfordsville
Clear
74° wxIcon
Hi: 76° Lo: 52°
Feels Like: 74°
Frankfort
Clear
77° wxIcon
Hi: 75° Lo: 52°
Feels Like: 78°
Delphi
Clear
73° wxIcon
Hi: 76° Lo: 52°
Feels Like: 73°
Monticello
Clear
73° wxIcon
Hi: 77° Lo: 52°
Feels Like: 73°
Logansport
Clear
73° wxIcon
Hi: 75° Lo: 50°
Feels Like: 73°
Mainly Dry and Warmer Rest of the Week.
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 112626

Reported Deaths: 3520
CountyConfirmedDeaths
Marion20832759
Lake10292318
Elkhart6415109
St. Joseph6156102
Allen6029200
Hamilton4724109
Vanderburgh344530
Hendricks2673122
Monroe247436
Tippecanoe226913
Johnson2268123
Clark215056
Porter207845
Cass19329
Delaware188261
Vigo178123
Madison159575
LaPorte137739
Floyd131461
Howard128563
Kosciusko120217
Warrick119936
Bartholomew115357
Marshall98924
Dubois95418
Boone95146
Hancock91143
Grant89133
Noble89132
Henry77024
Wayne74414
Jackson7409
Morgan70038
Shelby66529
Daviess64427
Dearborn63228
LaGrange63111
Clinton59212
Harrison56024
Putnam53710
Lawrence50528
Montgomery50521
Knox5019
Gibson4854
White48114
DeKalb45611
Decatur45439
Miami4263
Fayette41813
Greene41835
Jasper3862
Steuben3707
Scott35610
Sullivan33012
Jennings31212
Posey3060
Franklin29925
Clay2935
Orange28524
Ripley2838
Carroll27013
Wabash2618
Washington2611
Starke2537
Whitley2526
Wells2482
Adams2453
Jefferson2443
Fulton2342
Huntington2223
Tipton21722
Spencer2153
Perry21413
Randolph2087
Jay1730
Newton17111
Owen1651
Martin1640
Rush1524
Pike1401
Vermillion1260
Fountain1182
Pulaski1151
Blackford1133
Crawford1030
Brown1023
Parke941
Benton880
Union770
Ohio767
Switzerland700
Warren391
Unassigned0225

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events