Change Reigns Supreme at Burger King
MIAMI -- Burger King is revamping not only its menu, but also its look in a move aimed at stopping sliding sales, profits and market share.
The fast-food chain is slowly unveiling a new look for its advertising, menu and restaurants. According to The Miami Herald, Burger King is keeping its signature Whopper but will add healthier options to the menu, including Asian chicken salad and mango smoothies. In addition, the King will no longer be popping up everywhere, and the restaurant's décor will be updated with a contemporary red and black color scheme.
These changes come several months after 3G Capital took ownership in October. "The power of this brand is amazing," said Bernardo Hess, Burger King's new CEO. "What we have to do is build on that strength. Our approach is very pragmatic and straight forward. The turnaround is not going to happen overnight."
The quick-service restaurant's new management wants to make sure the menu offers something for everyone, especially the female customer who may have given a trip to Burger King a "thumb's down," according to the news outlet. The chain is already testing a dozen new products in markets across the country. They include mango and mixed-berry smoothies, a low-fat vanilla yogurt parfait with granola and berries, a chicken and apple salad with blue cheese, and a chicken BLT wrap with bacon and country Dijon mustard.
Burger King is not ignoring the beef-loving customer who has been its bread and butter. Test dishes also include a new premium home-style burger on a brioche bun with thick-cut bacon, romaine lettuce and spicy pepper grill sauce, the newspaper reported. "As we develop new products, we're focusing on best in class and quality," explained Jonathan Muhtar, vice president of global innovation. "In the past, there were compromises made with our food to ease operation and to take costs out of the product. Food quality and taste has to come first. Consumers come to Burger King because we've traditionally stood out for having great-tasting food."
Executives are not going it alone; they have invited several prominent franchisees to take an active role in the product development. And, as The Miami Herald reported, the hope is that even if some of the offerings are similar to McDonald's, customers will like Burger King's items better.
However, some industry analysts question this approach. "They've got to give customers a reason to come back and that's not a me-too version of McDonald's," said Ron Paul, president of Technomic. "They need something that's truly more innovative and a differentiated sandwich that gives you a reason to go there."
But Burger King's new owners are betting the changes will have a positive effect on the company's balance sheet. U.S. restaurant sales have continued to drop since 3G Capital took over, and Burger King most recently reported a $6.8-million loss for the quarter ending March 31. Same-store sales in North America dipped 6 percent for the quarter, although that decline was only 3.6 percent worldwide due in part to stronger international sales.
The new design features a black tower to give the locations more street-front visibility and big letters proclaim the restaurant as the Home of the Whopper. Drive-thrus now have canopies. Inside, Burger King will have more seating options, with movable tables for large parties and booths with banners designed as privacy partitions, according to the newspaper.
And, the paper reported, unlike a prototype unveiled a year ago by previous management, the remodel cost has been cut approximately in half to an average $275,000 per restaurant. Burger King is also offering an incentive package of reductions in franchise renewal and royalty fees to make the remodel more affordable for franchisees. The total savings per restaurant could be between $125,000 and $150,000. In addition, Burger King has lined up $250 million in guaranteed financing for franchisees with Rabobank.
The King himself is taking a break from advertising and promotions. Burger King is set to name a new advertising agency, and new commercials will focus more on the food.