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Eight Great Burger Brands Face Off in Round 4

More than 27,000 votes were cast during the A.1. Burger Brackets’ just-ended Round of 16 and the head-to-head battles were amazingly close. You all have some seriously dedicated fans.

Burgatory looks like it seriously intends to repeat as champion. Can anyone catch it? In Round 4 that is iconic A&W’s task. The always-strong Bagger Dave’s Burger Tavern confronts Red Robin, which mounted an amazing rally in the closing hours to edge Five Guys by just a few votes. The pride of the Southwest, Whataburger, takes on surprisingly tough Back Yard Burgers, which has knocked off some high-profile brands (like In-N-Out Burger) to reach Round 4. And then there’s Mooyah, the Plano, Texas-based burgers, fries and shakes specialist making its Burger Brackets debut and tripping up anyone who underestimates its popularity. It faces Wayback Burgers (formerly Jake’s), the fast-growing retro burger shop from Cheshire, Conn. Its supporters are loud!

So the Round of 8 should be interesting. But it’s another two-day weekend round to see just how loyal your fans really are. Do they love you on weekends too? Voting for this round ends Sunday at 7 p.m. Go to the VOTING PAGE to back your burger joint! Please support Bracket sponsor A.1. Steak Sauce: they make this fun possible! Good luck to all! Click here to continue reading Eight Great Burger Brands Face Off in Round 4

Restaurant Ad Spending: $17.7 Million a Day

For the third consecutive year, restaurant advertising spending increased sharply more than total U.S. ad spending (see chart). Restaurants spent $6.449 billion on measured media (TV, magazines, newspapers, Internet display ads, radio, outdoor boards and free-standing inserts), a 5.2% increase over 2012 spending, according to data from Kantar Media.

Significantly, that 5.2% is significantly greater than last year’s 2.9% increase in ad spending by the restaurant category’s largest single advertiser, McDonald’s Corp. The $988 million it spent accounted for 15.3% of total 2013 restaurant advertising dollars.

Total U.S. ad spending rose just 0.9% to $140.2 billion last year. The lack of Olympic and political spending during the year limited growth, Kantar reported. It noted that the largest 1,000 advertisers as a group are spending more while smaller companies sharply cut back spending last year.

2013 Ad Spending

Total ad spending during 2103’s Q4 was positive (+1.6%) during what was a very volatile year. Total ad spending declined 0.1% in Q1, jumped up 3.5% in Q2 and then fell 1.9% in Q3. Restaurant ad spending had declined 3.6% in Q3, falling farther than overall spending, before bouncing back in Q4.

Heavy support for McDonald's Dollar Menu & More help boost Q4 ad spending.

Heavy support for McDonald’s Dollar Menu & More helped boost Q4 ad spending.

Although restaurants spent roughly $17.7 million on advertising per day in 2013, the category ranked 8th among advertisers. And its 5.2% increase was not the largest. Ad spending in the telecom category was up 8.2% in 2013; the insurance category was up 8.1%. The largest decline was the 11.4% drop by direct-response companies.  Ad spending also declined (-4.1%) in the financial services category.

Among media, the largest gain in spending was in Internet display ads (15.7%) while network radio showed the largest decline (-15.9%). Spending on cable TV was up 7.3%; spending on network and spot TV was down. Newspapers continued to slide, down 3.7% for the year.

Burger King backed the Big King and Satisfries in  Q4.

Burger King backed the Big King and Satisfries in Q4.

McDonald’s $988 million in 2013 advertising –or $2.7 million a day–compares with $960 million spent in 2012, according Kantar Media data. McDonald’s remains by far the category’s biggest spender. It helped increase Q4 restaurant spending with heavy lobbying for its Dollar Menu & More.

Other Q4 restaurant advertising highlights were Wendy’s backing of its Pretzel Pub Chicken and Bacon Portabella Melt on Brioche burgers; Burger King’s introduction of Satisfries and its Big King; Carl’s Jr./Hardee’s promotion of freshly baked buns for premium burgers; Jack in the Box’s tandem introductions of its Jalapeňo BBQ Burger and Fajita Ranch Melt sandwiches; and Sonic’s Island Fire Spicy Chicken line.

$12 Burger Anchors New Swiss McDonald’s Menu

McD_Swiss_Prime2McDonald’s has launched a new upscale “Signature” menu lineup in Switzerland that boasts a $12 burger called The Prime along with a range of Caesar salads.

This is in line with the trend, tipped here earlier, to QSRs making menus unabashedly fancier in style and preparation. “Posh Making a Comeback on Menus” was the headline on that post. It referenced the revival of the “M Selections” line at McDonald’s in Australia; Red Robin’s white-glove-and-pearls presentation of its high-price Finest burger line; the “Casual attire. Formal flavor” line used to promote McDonald’s Bacon Clubhouse burger in the U.S. and more. Add Switzerland to the list.

McDonald’s says The Prime burger and the other items in the Swiss Signature line were developed in conjunction with local TV cooking show host René Schudel, who is featured in advertising. A beyond-the-scenes video about Schudel and the making of the Prime can be seen here. According to complaints lodged on McDonald’s Swiss Facebook page, the burger has a suggested price of 10.90 CHF or about $12.31. Several consumers say there that the burger is good but too expensive.

McD_Swiss_SignatureThe burger itself is a 180-gram (6.3-ounce) Swiss beef patty topped with “rustic mountain cheese” plus bacon, coleslaw, arugula and a special sauce. TV advertising boasts it has everything a burger should: “character, taste and size.”

But The Prime is only the anchor for the new Signature menu line. It also includes oddly shaped fries (flat and round like chubby potato chips), and four salads: The Ebly Salad (with wheatberries, melon, tomatoes and “a fine dressing”), potato salad (with dried tomatoes), coleslaw (with carrots and cabbage) and Caesar Salad (plain or with grilled or crispy chicken).

Sonic Investing In POS Technology

Side-stepping the currently feverish fascination with mobile payment apps, Sonic Drive-In is asking its franchisees to invest instead in new point-of-service technology. After a nearly a year of market testing, the chain—known for its carhops on roller skates—says this technology yields higher sales and an increased average check.

Sonic_400There are two parts to the new tech package: an improved point-of-sale (POS) system and a Point of Personalized Sale or POPS platform. Coupled with a supply-chain-management system update the chain has completed, the POS element should “result in improved food and packaging costs, … streamline order processing and reduce product waste, optimize labor and [reduce] theft at the store level, all of which will play into improving margins for our average operator,” Chairman-CEO-President Cliff Hudson told analysts this week.

The POS element must be in place before each Sonic can install the POPS system. Essentially it is an interactive screen in the middle of a new Sonic menu-board housing. Currently it primarily does suggestive selling of promotional items throughout the day. But Hudson said the software will continue to evolve to “individualized promotion with a customer … based on what that customer is ordering,” Hudson said. Tied to loyalty programs, the POPS can provide “individualized marketing.”

Sonic predicts the POPS technology will boost sales and checks.

Sonic predicts the POPS technology will boost sales and checks.

“We think it’s going to be very positive for us over the next several years,” he said. “We are very excited about it and we believe it’s going to enhance the customer experience. Its also going to drive sales and system profitability at the store level.” Where tested, “we’ve seen a nice increase in sales in the stores that are utilizing it, increasing check with increased combo sales; but as you would expect we’re also selling the products that we promote with POPS,” Hudson added.

The POS system is in 250 company stores now, with the remaining 320 company stores upgrading to it next week. The combination POS/POPS technology will be in all company units by summer, with franchisees—who operate about 2,950 units—taking it on beginning this fall.

The POS element costs about $30,000 and the POPS another $80,000 per restaurant, with the company expecting franchisees to commit and additional $20,000 per store to “kind of refresh a little bit of a trade dress element,” Hudson said.

However, vendors will subsidize as much as 40% of the cost of the POPS technology. “Our view is that the total cost of the package is reasonable given the return on investment we’re expecting from an increase in sales and profits,” Hudson said.

Asked about Sonic’s interest in the kind of smartphone app that Burger King and Wendy’s are rolling out, Hudson said it is “something we are testing now, and it is something we hope to spread more broadly this summer.” But systemwide implementation in unlikely before the second half of 2015, he said.

Sonic is known for its expansive beverage program and that will be the focus of some of its upcoming promotional activity. For the third year it will do a “Summer of Shakes” program with 25 different flavors. A spring-summer “Summer of Slush” campaign will promote 25 new flavors of its CreamSlush Treats.

French Burger Chain Protects its Turf

On the heels of Burger King’s return to France and its opening a unit in Paris’s busy Gare Saint-Lazare train station, France’s No. 2 burger chain Quick has unveiled a new small-space concept called “Burger Bar by Quick.”

The first is expected to open this summer in Paris.

The first is expected to open this summer in Paris.

The company said the new brand is designed for spaces of 150 square meters (492 square feet). This includes city-center sites, malls, railway stations and airports. The menu will be reduced to core menu items: burgers , fries and ice cream.  The 12 burgers offered will include its Quick and Giant burgers plus the Max burger meal bundles. The first Burger Bar by Quick will open this summer in Paris.

The concept, which the company says “marks a return to the origins” of the burger shop, will be self-service. What it offers, says Quick, is “Fast Food, Good Food, Easy Food.” The new Quick concept was first reported by French restaurant blog fastandfood.

In a statement, Quick Group Director of Operations France Francois Charpy said the down-sized concept strengthens Quick  “in the fastest growing segment of the fast-food industry: burger. This unique variation of the Quick brand with a simplified offer around four easy to prepare flagship recipes should enable the Group to initiate a new phase of its development in France and attract new customers and franchisees.”

Founded in 1970, Quick operates 498 restaurants in France, Belgium and Luxembourg. It reported sales last year of  €1.074 billion ($1.48 billion). McDonald’s operates 1,300 restaurants in France, 67 in Belgium and nine in Luxembourg.

Burger King closed its stores in France in 1997 but returned last year, opening first in Marseille Provence Airport and then on a highway near Reims. The Saint-Lazare station location marked its return to Paris. Earlier this month, Burger King formed a new joint venture with Bertrand Holding Co. and Naxicap Partners to accelerate its expansion in France.

France has proved to be a sold quick-service market. Despite troubles elsewhere in Continental Europe, McDonald’s reported positive sales in France in each of the last five months of 2013. Fast-food sales in France are projected to rise 4% to $12.8 billion (9.43 billion euros) this year after declining in 2012, according to data from researcher Euromonitor International.

A.1. Burger Brackets: 16 Burger Brands Still Standing

If anyone tells you this year’s basketball tournament has been amazing, tell them they should check out the 2014 A.1. Burger Brackets! Another No. 1 seed has fallen as the field narrowed to 16 from 32 after the tough weekend test. The remaining competitors have until 7 p.m. CT on Friday, March 28 to get the vote out. That’s a whole week of voting, but the competition keeps getting tougher. The 16 burger brands remaining have shown that their fans will support them all day every day.

The Round of 16 Matchups are shown below. Click to see the updated brackets spreadsheet. To VOTE, go to the A.1. Burger Brackets page. Good luck!

Round of 16 Matchups2

Can Mobile Payments Solve QSRs’ Problem?

Mobile ordering/payment apps are the current hot buttons, but will they provide the meaningful sales boost that quick-service burger-chain sales need so badly?

Burger King has been testing its app in Salt Lake City.

Burger King has been testing its app in Salt Lake City.

After lengthy field testing, Burger King says it will introduce its mobile payment platform for smartphones next month and will have it available systemwide by year-end. This push is in line with comments made during  last year’s Morgan Stanley Global Consumer Conference by Burger King CFO Josh Kobza: “Consumers are going to expect ordering online, and coupons on mobile. It’s something we all have to do. There are still open questions, but I expect to see it in the industry sooner than later.”

Wendy’s, too, has been testing mobile payment and now says it also will have the capability rolled out this year. McDonald’s continues to test its MCD app that provides discounts and news but doesn’t allow for online ordering or payment.

Quick-service restaurants are leaking customers. McDonald’s U.S. guest count was down 1.6% in 2013. I assume most of those departures are by higher-income and suburban consumers since lower-income and center-city diners have fewer options from which to choose. Will mobile payment bring back high-end defectors? And how likely are current QSR heavy users to use mobile payment?

Technomic data finds that 11% of consumers have paid for a restaurant meal using mobile technology and 46% of those users say the ordered through a restaurant’s app. That’s all restaurants, including pizza restaurants where most orders are made by phone.

Starbucks says that 14% of its U.S. in-store transactions now involve mobile payment. But that’s Starbucks, which draws the kind of consumer who has moved away from fast food. McDonald’s average drive-thru time of 189.49 seconds in last year’s QSR magazine study was its slowest ever, but will mobile platforms really speed that up?

Recall McDonald’s CEO Don Thompson’s remarks last October: “In the U.S., we continue to experience a bifurcation of the consumer base. McDonald’s core customers skew towards those customers whose disposable income is not rising as much and are spending a little bit less in QSR.”

Certainly some customers will use mobile ordering/payment apps from the burger chains, but I still believe the introduction of a popular new burger like the Big King, Ciabatta Bacon Cheeseburger or Bacon Clubhouse will do more to help sales than will anything digital.

Round 2 of the Burger Brackets Has Begun!

Round 1 is complete. The field has been reduced from 64 to 32. But there really aren’t any losers. Every burger brand that came up short put up a crazy good fight. Burgers rule because Americans love their burgers and their favorite places to eat them. That’s what the Burger Brackets show! A crazy total of 68,817 votes were cast just during the first round. You folks had your brand’s back!

But Round 2 is tougher because it lasts just two days. Voting closes at 7 p.m. CT on Sunday, March 23. So get the troops re-energized and get them voting. The Round 2 matchups are below. CLICK HERE to go to the A.1. Burger Brackets Voting Page. Good luck to all!

Round 2 MatchUps