Burger King

Sep 4, 2021 | Report Announcements

Burger King is the 3rd largest burger chain (by US system sales) with a well-established brand equity around flame grilling (over an open flame), highlighting a clear difference from griddling. Its burger platforms include the signature Whopper configurations and various “King” varieties. Management plans to focus on driving innovation in its core menu while accelerating permanent daypart and category extensions. To this end, the June 2021 launch of its hand-breaded Ch’King Sandwich helps BK enter into the chicken sandwich war with a new platform that will be used to generate new news going forward. Menu quality upgrades (85% of its permanent menu is now free from artificial flavors or preservatives) are designed to help the brand upscale its market reach while $1 value emphasis (BOGO for $1 & $1 Your Way Menu) is intended to sustain traffic from core customers. Funny TV ads feature: compelling food shots; humorous testimonies from actors that look like real customers; and use of “King” mascot (with a big-headed mask). Value ads feature the King mascot wearing a thick gold chain and sporting a money gun that rains dollar bills, supporting the notion that BK’s cash strapped customers can feel rich with their dollar deals. The system is currently testing a new rewards-based loyalty platform for digital customers (Royal Perks) and the rollout of its outdoor digital menu boards improve service speed while integrating with the app, facilitating its loyalty program. In any case, BK’s comp underperformance since 2018 reflects the brand’s challenge to expand beyond its orientation towards a lower income demo that has been struggling from before the lockdown (but especially post-lockdown). This demo orientation requires a strong emphasis on price point value, making it difficult for the brand to drive check. During 2Q21, corporate reported that is not satisfied with its current performance as it relates to focusing sufficiently on its few, key priorities and moving at a sufficiently fast pace which led to the departure of the president of BK Americas. In conclusion, Burger King must continue to find ways to expand its market reach towards new, more affluent consumers who are willing to pay for the brand’s strong core equities and quality upgrades.

Marketing Consumer Research Weekly Banner
NoBull Posts Thumbnail
Restaurant Research

Email Sign-up

15 Second Posts

Latest Release for Personal Consumption Expenditures (PCE)

The consumer still looks good according to the government’s recent release of personal consumption expenditures (for August 2023) as there have not been any material changes in growth for either disposable income or consumption expenditures.

Small Biz Insights on Trucking Industry

In this post, we discuss the massive post-covid changes to the trucking business with Tony Lovallo who has been running his own freight company since 2010. Tony’s insights provide a 360 look into the shipping business & consumer patterns with important economic implications.

Darden 1Q24: Sales +11.6% Y/Y, Comps +5.5% Y/Y

Darden reported that industry same-restaurant sales increased +0.9% and industry same-restaurant guest counts decreased -4.2% during its fiscal 1Q24. The chain’s comps outperformed the industry by +4.1% and its traffic outperformed by +4.3% (= flattish traffic for Darden during the quarter).

Job Market Looks Solid

In this chart, we subtract total quits from total hires. The excess of hires over quits looks very good relative to the historical level even though the positive gap recently dipped slightly. Workers are staying at their jobs longer even as they continue to have new employment opportunities.

The Economics of Politics

As the U.S. gears up for the 2024 elections, it is important to consider changes to our elections and governance that can unite the citizens of this great country.

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company