Burger King looks to hero products and digital loyalty

Burger King, the quick service restaurant (QSR) chain, is “navigating a transition in the US”, which involves a reappraisal of its value offerings and a winding down of paper coupon offers.

Underperforming value sales were one factor in a 1.6% decline in comparable sales in the brand’s US operations, Jose Cil, CEO of Burger King’s parent company Restaurant Brands International, told a quarterly earnings call. 

“All our data shows our flame-grilled Whopper outperforms the hero product of our competitors, yet many of our burger promotions for the last few years have focused on sub-brands or extensions to our core rather than doubling down on our flagship hero products,” he said. 

Why it matters

Burger King is applying lessons domestically from its fastest-growing overseas markets. Its businesses in China and South Korea, for example, generate almost 90% of sales from digital channels, and in China over 50% of sales come from known diners. 

Royal Perks
Another factor in the sales decline was anticipated, as the brand shifts away from paper coupons, which Cil described as a “declining promotional channel that we’ve historically over-indexed relative to our peers”. Burger King claims to have already converted 80% of its registered digital guests to its new Royal Perks digital loyalty scheme which only rolled out last month. 

Key quote

“[We’re focused] on building more sustainable long-term sales through our digital platforms and … maximising media firepower behind growing channels with increasingly tailored offerings for our guests” – Jose Cil, CEO, Restaurant Brands International.

Sourced from The Motley Fool