Burger King Going After Casual Dining

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Burger King Going After Casual Dining

CHICAGO -- Burger King is closing in on the troubled casual-dining industry with a new slate of premium items, including ribs and thicker burgers, AdAge.com reported.

"These up-market products are going to meet with great reception, great value for the money perceptions, and they cook out beautifully on the new equipment," Burger King CEO John Chidsey said on a recent earnings call with investors. "We have license as Burger King to be in the business of thicker burgers, products like ribs, and I won't go any further because there are still some that are under wraps."

Russ Klein, the company's president-global strategy, said the new products that are in the works are about expanding the chain's "barbell" menu strategy with a variety of both lower- and higher-price items. "Value for the money also comes with premium products that are on par with casual dining that are available for a fraction of the price," Klein said. "So, we work the value for the money equation on both ends of our menu."

It's a great time to go after casual dining as many of the segment's once-unstoppable darlings such as Cheesecake Factory and Applebee's have fallen on hard times. While Burger King posted a 5-percent increase in third-quarter same-store sales, Applebee's fell 3 percent and Cheesecake Factory dropped 5 percent. And most industry watchers aren't expecting them to recover anytime soon, according to AdAge.com.

To prepare for the new products, Burger King operators are adding grills and other back-of-the-house equipment. Klein said about 20 percent of U.S. locations have the products ready to go, and 50 percent of U.S. locations have the batch broilers in place.

National advertising could begin next summer, but the chain has no plans to pull back on value-menu advertising, Klein noted. The company's agency is Crispin Porter & Bogusky in Miami. "We're going to continue to drive against higher quality and innovation, which are better values for the money than one can find in casual dining as well," he said.