Burger King, Starbucks look to retail

11 June 2009

NEW YORK: Burger King, Dunkin' Donuts and Starbucks are among a growing number of companies seeking to increase their presence in US grocery stores, as they try to adapt to changing consumer behaviour in the wake of the economic downturn.

Starbucks sells a variety of grocery goods, including a premium chocolate brand, Chocolate Discover, three variants of coffee, branded ice cream and drinks like Frappuccino and DoubleShot.

It has recently started offering discount vouchers for its supermarket coffee and ice cream ranges to customers in its coffee houses.

Greg Price, the company's vice president of global consumer products, argued this initiative means that if "consumers are coming in less frequently, they can still treat themselves at home."

Later this year, Burger King will launch its Apple Fries – apples that have been "sliced" and packaged so they look like fries, and which form part of its children's menu – in 10,000 stores across America.

This builds on its previous introduction of brand extensions such as potato chips with flavours like "Ketchup & Fries" and "Flame-Broiled Burger".

John Schaufelberger, its svp of global product marketing and innovation, said this "gives our brand a lot of great new exposure to consumers who might not have Burger King top of mind."

California Pizza Kitchen, another restaurant chain, has also recently agreed a tie-up with Kraft to distribute its Flatbread Melts, as a way to offset falling revenues elsewhere.

Rick Rosenfield, one of the company's co-founders, said that "our comparable restaurant sales are down. People are trading down to supermarkets and we're softening the blow by being there for them."

Dunkin' Donuts has similarly begun to sell bags of its coffee through established retailers, in an attempt to improve overall perceptions of its brand.

Meghan Glynn, director of corporate communications for The Kroger Company, the grocery chain, posited that "if people can save a few dollars and save some time by eating at home, these types of familiar brands ... make it easier and more cost-effective."

Data sourced from Wall Street Journal; additional content by WARC staff