11.06.13 5:41 PM ET
Burger King Introduces Big King to Taunt McDonald’s and Stagnating Overall Sales
The Burger wars are heating up.
On Tuesday, Burger King introduced its latest menu offering: the Big King The alpha male product is bigger than the whopper and is a way of giving meat lovers what they want, while also giving a noogie to McDonald’s.
It’s the most recent indication that the stakes for the nation’s largest burger chains seem to be rising at a time when the rewards are actually falling. Fast-food isn’t doing particularly well. The vast industry, which relies on low wages, low prices, and a low-quality dining experience just isn’t working the way it used to. During the recession and the recovery, fast-food more than held its own because of its sheer cheapness. People traded down from fast casual to quick service.
But as the economy has improved—with about 7 million new jobs since February 2010 and 51 months of growth —sales growth has faded. Americans are starting to eat out more, but they’re doing so at places other than traditional fast-food joints. They’re going to Chipotle, or flocking to new chains like Noodles & Co. People who crave beef patties have a growing array of quality burger joints to choose from. And there’s a phenomenon of burger chains that define themselves in opposition to the old school fast-food joints by paying higher wages.
The upshot is that U.S. sales for McDonald’s and Burger King, the Coke and Pepsi of fast food, are stagnating, much as sales of Coke and Pepsi are stagnating in the U.S., as Americans abjure sugar and chemical-laden fizzy drinks for water and more salubrious beverages. At McDonald’s in the third quarter, U.S. same-store sales were up just .7 percent from the year before, and in the second quarter same-store sales were up just 1 percent from 2012. At Burger King, in the third-quarter, same-stores sales in the U.S. and Canada fell .3 percent and the company closed 13 restaurants, “due to continued softness in consumer spending and ongoing competitive headwinds.” In the second quarter, same-stores sales in the U.S. and Canada fell .5 percent.
To combat the malaise, fast food joints are pursuing a high-low strategy, or, as I prefer to dub it, the “Moms and Bros” strategy. They’re trying simultaneously to appeal to higher-end consumers who are concerned about nutrition and quality (Moms) while offering their core users who crave cheap, satisfying gut bombs (Bros) new reasons to come in.
So Taco Bell simultaneously aimed to recapture some of the business that had gone to Chipotle with its Cantina Bell line, created in partnership with celebrity chef Lorena Garcia, which features whole foods, a focus on beans and vegetables, and zesty, real flavors. At the same time, Taco Bell has rolled out the Doritos Locos Tacos and the Fiery Doritos Locos Tacos. An affront to nutritionists and foodies alike, the new innovations deliver the salty, greasy punch that power users of fast-food crave.
McDonald’s has done the same. It has rolled out salads and fruit and smoothies, which are intended to appeal to Moms. This fall, at the Clinton Global Initiative, McDonald’s announced that in its largest markets it will strive to substitute a salad, veggie, or fruit for French fries in value meals, and stop promoting sodas as the beverage in kids-oriented Happy Meals. But at the same time, the Golden Arches was preparing its own version of one of the Bro-iest food products out there: chicken wings. McDonald’s Mighty Wings were launched in September and are heavy on the bro-ness. The ad campaign features football quarterbacks Drew Brees and Colin Kaepernick, a cheerleader and a blond sideline reporter.
Burger King, now under new ownership, is doing the same—while taking a direct swipe at McDonald’s. In September, I reported on the splashy, female-friendly roll for a Burger King innovation ten years in the making: the new crinkle-cut French fry, dubbed the Satisfry, which has 40 percent less fat and 30 percent fewer calories than the regular product.
A tasty, more-forgiving fry might help bring in more Moms. But Burger King’s core male users really care not a whit for calorie counts. And Burger King hasn’t forgotten about them. Which is what spurred the introduction of the Big King (McDonald’s last month indirectly tweaked Burger King by ditching Heinz ketchup in a few markets, in part because Heinz is now owned by the same Brazil-based private equity firm that owns Burger King.)
So what is the Big King? It’s kind of like a Whopper, but it has two beef patties, plus, “freshly cut lettuce, crisp onions and signature King Sauce, all on a three-layer warm, toasted, sesame seed bun.” In other words, it’s a lot like the Big Mac. (Diners of a certain age will certainly remember the classic 1970s Big Mac ads that listed the ingredients in rapid-fire succession.) Of course, as Burger King noted, this version is grilled, not fried. “What makes the new BIG KINGTM different than any other burger on the market is the unique fire-grilling that BURGER KING® has been known for, for almost 60 years,” as Eric Hirschhorn, chief marketing officer for North America at Burger King put it in a press release.
The Big King packs 510 calories, 29 grams of fat, 65 milligrams of cholesterol and 780 milligrams of sodium, while the Big Mac has 550 calories, 29 grams of fat, 75 milligrams of cholesterol and 970 milligrams of sodium.
And so the war continues. Burger King’s move does represent a departure of sorts. Many fast-food companies with sagging sales often seek to juice business by rolling out cheap versions of existing products—like Burger King’s efforts to sell a $1 burger with a few French fires on top of it. But that strategy often backfires. Yes, people will come in to buy a burger. But only those with extremely low self-esteem (or serious problems) will buy three or four to consume on the spot. By contrast, if you can boost the price of one of your basic products, you can move the needle on sales just by convincing a few of your regular customers to try the new, new thing. And that’s what Burger King seems to be doing with the Big King. It costs $3.69.