Feeling the pinch from QSR burger chains’ $1 menus? Consider this response from Farm Burger in Decatur, Ga. On Monday, Aug. 19, it will hold “Grassfed Fête” to celebrate its 3½ years in business.
The celebration feature’s the concept’s own version of a $1 menu. And this one has local connections that no chain can match: $1 Moonshine Meats 100% grass-fed beef sliders; $1 pulled pork sandwiches from a whole roasted Anderson Farms hog; $1 Darby Farms Spicy Chicken Wings; $1 quinoa veggie burgers with goat cheese and pickled veggies; $1 beer-battered onion rings and $1 sweet-potato or regular fries. Lil Farmer Meals for kids are just $1, too. Red Hare root beer is $1 and so are Red Hare root beer floats.
Atlanta’s Southern Folk Preservation Society All Stars provide the music.
With locations in Buckhead (Atlanta), Dunwoody and Decatur, Ga., plus Asheville, N.C., the chain has built a reputation for great daily specials. On Aug. 14, for example, the Buckhead location’s Daily Burger was a grass-fed beef patty with pepper-Jack, cheese, red cabbage slaw, pickled jalapeños and sherry-date BBQ sauce. At Decatur it was grass-fed beef with Gruyère cheese, sautéed local Lacinato kale, mushrooms and paprika mayo.
The difficulty of the current restaurant marketplace is such that despite reporting solid results, Red Robin Gourmet Burgers executives felt compelled to advise analysts that sales increases are hard won. “The environment continues to be volatile from a consumer spending [perspective],” SVP-CFO Stuart Brown cautioned. “Consumers continue to pull back even more than we had expected at this point in the economic cycle.” He said the market has softened more just in the past several months, explaining the series of negative growth reports for July given by several chains.
For its second quarter ended July 14, 2013, Red Robin reported a 4.3% gain in same-store sales for company-owned restaurants. However, that gain came from a 5% increase in average check mitigated by a 0.7% decrease in guest counts.
More than half (2.7%) the 5% check average came from increased sales of appetizer, beverage and dessert sales, with the remaining 2.3% coming from pricing. Red Robin’s instituted tiered pricing for appetizers this spring. Items are grouped as $3, $5, $7 or $9 in price, which has helped boost sales. The appetizer plan has “resonated well with consumers,” said SVP-CMO Denny Marie Post. She cautioned that appetizer sales may have benefited from initial trial that may not be maintained.
Tiered pricing for appetizers has won customer acceptance.
Red Robin says it has improved food plating and presentation as well as service as a result of its “brand transformation” tests.
The increased pricing has come from shifts such as upping the price for the Pig Out Style burger-toppings option to $1.50 from $1 and adding a Kuzuri Style option at $1.50. Post said the chain has seen “no evidence that [the Style price hikes] cause any harm.”
But Red Robin’s $12.15 average check remains one of the lowest in the casual-dining segment, CEO Carley said.
Carley declined to give details about Red Robin’s test of premium burgers. But as previously reported here, that test includes three Black Angus prime beef burgers with toppings such as oven-roasted tomatoes, sautéed Portobello mushrooms and house-made aïolis and sauces. Coupled with the chain’s Bottomless Steak Fries, the premium burgers are at priced from $12.99 to $14.29. The premium burgers, served with the chain’s Bottomless Steak Fries, are priced from $12.99 to $14.29.
Red Robin’s “brand transformation” initiative involving a test of three levels of remodeling investment continues to provide useful insights, Carley said. The nine restaurants (of a total of 20 remodels) that have received the full $400,000 treatment have seen a 6% sales lift. Red Robin is doing an additional 20 transformations this year and then will “rest” to evaluate results, said Brown. Next year the chain intends to test a lower-cost remodel package for lower-sales units. The payback period on the investment is estimated to be less than five years.
Here’s where we are with four trends influencing the burger business:
Sonic’s Breakfast Burritos: now with egg whites.
BLT: Bacon mania has, not surprisingly, brought a renaissance for the BLT sandwich. BLT burgers had to follow and they have. McDonald’s first tried a Quarter Pounder BLT in Japan, then moved it to Canada. Now the QP BLT is offered across Texas, North Carolina, Virginia and other markets. Watch for it to be nationally available soon.
Egg whites: Sonic Drive-Ins have followed McDonald’s lead and now offer the option of egg whites only in place of whole eggs in breakfast burritos and sandwiches. McDonald’s Egg White Delight McMuffin started the trend. Is anyone out there offering an egg-white-topped burger?
Cronut Burger from Epic Burgers and Waffles in Toronto.
In Japan, McDonald’s has added an eggless McMuffin that’ more lunch than breakfast. The summer McMuffin has a sausage patty with tomato slices, Cheddar cheese, lettuce and yellow mustard.
Ruby Tuesday’s pretzel burgers
Cronuts: The hybrid of the croissant and doughnut created (and trademarked) by pastry chef Dominique Ansel has received far more media attention that it merits. But when the trend creeps into the burger arena, well, that’s news. Toronto joint Epic Burgers and Waffles and bakery Le Dolci are teaming to offer Maple Bacon Cronut Burgers at the Canadian National Exhibition in Toronto from August 16 through September 2. The price for such trendiness? The burgers will be $10 each.
Pretzel-bun burgers: They’re the burger trend of 2013 (which you’ll recall BurgerBusiness.com forecast would be The Year of the Bun). Wendy’s Pretzel Bacon Cheeseburger kicked it off. Dunkin’ Donuts has answered by offering any of its bakery sandwiches on a pretzel bun. And casual-dining chain Ruby Tuesday has joined the parade with a set of four pretzel-bun burgers. The varieties: Spicy Jalapeňo Pretzel Cheeseburger; Portabella Crispy Onion Pretzel Cheeseburger; Bacon Cheese Pretzel Burger; and Black and Blue Bacon Pretzel Burger.
The Angus Mac makes its debut in Australia on August 28.
Since its national introduction in 1968, McDonald’s Big Mac has been composed of “two all-beef patties, Special Sauce, lettuce, cheese, pickles, onions on a sesame-seed bun,” according to the jingle. But later this month McDonald’s will depart from that classic build with the limited-time addition of an Angus Mac variation in Australia, where Angus burgers remain on the menu and continue to be popular.
Taking the place of two-all beef patties will be a single Angus beef patty, a McDonald’s spokesperson has confirmed to BurgerBusiness.com. The other key ingredients—Special Sauce, lettuce, cheese, pickles and onions—will be there, however, making it one of the few official Big Mac variations McDonald’s has allowed. All of them have been introduced in international markets. In January of this year, McDonald’s Japan brought back a four-patty Mega Mac sandwich it has offered before. In Germany last year, McDonald’s tried a 45% larger Bigger Big Mac.
Japan’s Mega Mac
The Angus Mac will be on menus in Australia on August 28, just before Father’s Day (celebrated there on the first Sunday in September). In keeping with the paternal occasion, McDonald’s also will debut a slightly smaller Son of Mac. That gives McDonald’s operators a less expensive burger to balance the premium-tier Angus Mac, priced at AU$5.95 (US$5.34). Special Father’s Day cupcakes also will be made available, according to sources.
Germany’s Bigger Big Mac
Angus Third Pounder burgers were removed from the U.S. menu in May of this year and replaced by upgraded Quarter Pounders. But the Angus Mac still could appear on the U.S. menu in the future: During McDonald’s “Open Door” meeting in June, CEO Don Thompson told BurgerBusiness.com that bringing back Angus burgers as LTOs has not been ruled out.
McDonald’s Australia has reported negative same-store sales this year, pushing it to develop new budget-friendly offers. As reported here earlier, that includes the current “Making Early Easy” promotion involving free breakfast items on successive Mondays through Aug. 19. Another current promotion also involves a giveaway: A free Coca-Cola glass with purchase of any large Extra Value Meal.
McDonald’s Big Mac has become so ubiquitous globally that it has become an accepted measurement of international currency valuations. British magazine The Economist famously created its Big Mac Index in 1986 based on what it says was “the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries. For example, the average price of a Big Mac in America in July 2013 was $4.56; in China it was only $2.61 at market exchange rates. So the “raw” Big Mac index says that the Yuan was undervalued by 43% at that time.” The most recent Big Mac Index can be accessed here.
The Trouble from Grill ‘em All
8 Oz. Burger Bar’s Beef & Lamb Gyro
The burger business thrives on creativity, as evidenced by many of the August Burger of the Month specials on offer at burger joints across North America. The cleverness shows in some of the names, such as The Avenue’s HueyDeweyLouie Burger, The Freshman 15 at Twisted Root and The Secret Squirrel BBQ Burger at the always-inventive Blue Moon Burgers. And remember: The Kevin Bacon burger is available this month only at Burger 55.
Of course, there is no end to the number of creative combinations of foods and flavors between buns. Consider Eden Burger Bar’s use of sausage bacon, dry-aged beef, chipotle Gouda, sautéed onions & peppers and beer-battered sauerkraut drizzled with a spicy honey mustard. Kuma’s Corner Nails burger honors one of the joint’s favorite bands with a burger topped with serrano-chile paste, bacon, mint-basil chimichurri, pulled pork, smoked Gouda garnished with whole fried mint. And the description of how Slater’s 50/50 makes its Supreme Nacho Burger will make you laugh, hungry and envious.
So, as the Brits say, tuck in to this month’s list of Burgers of the Month. Borrow freely. Eat well.
Slater’s 50/50′s Supreme Nacho Burger
The Avenue’s HueyDeweyLouie Burger
5 Star Burgers, multiple Southwest
Adobe Burger ($9.50)
Harris Ranch beef with provolone, chipotle Mayo and crisp tortilla strips
8 Oz. Burger Bar, Seattle
Lamb & Beef Gyro
Stuffed feta, romaine, pearl red onion, cucumber, olive tapenade and curry Tzatziki
The Avenue, St. Petersburg, Fla.
HueyDeweyLouie Burger (12.50)
Angus patty with Havarti cheese, house-cured duck bacon and Dijon sauce on a croissant roll. White truffle Parmesan fries on the side.
BGR: The Burger Joint, multiple locations
Topped with ham, grilled pineapple and teriyaki sauce
Burger Revolution’s The Rising
Chili Cheese Hot Dog Burger at Oinkster
Blue Moon Burgers, Seattle
Return of The Secret Squirrel BBQ Burger
Toasted brioche (we have a flakier lighter brioche bun now) with green tomato pickles, 1/3-lb. premium local beef patty, Muenster cheese, thinly sliced onion rings and our Secret Squirrel BBQ Sauce
Bobby’s Burger Palace, multiple locations
Smoked Cheddar, mustard barbecue sauce, green-onion slaw
Buckeye Beer Engine, Lakewood, Ohio
Mango Adobo Burger ($9.50)
Half pound of fresh ground beef seasoned with adobo and topped with pepper-Jack and Cheddar cheeses and Beer Engine mango avocado salsa Click here to continue reading Burgers of the Month for August 2013
Source: U.S. Department of Labor Statistics/Consumer Price Index
Already high ground beef prices could go even higher by yearend and into 2014, according to some analyses of recent production and price data. The latest U.S. Department of Bureau Labor Statistics Consumer Price Index data for June 2013 show the average retail price for 100% ground beef hit $3.382 per pound. That’s up 2% from $3.311 but 12.5% above the June 2012 price.
Prices have risen even more steeply for lean/extra-lean ground beef. The CPI pegged it at $4.805 per pound, up 18.6% over the year-ago price. Ground chuck is high at $3.403 but that is a 1.7% decline from a year ago.
Will rising costs slow burgers’ popularity?
Smaller herds resulting from droughts in cattle country are cited as a major reason for the price rise. The number of domestic cattle and calves on Jan. 1, 2013, was 89.3 million, a 2% decline from 2011 and the lowest herd size since 1952, the U.S. Department of Agriculture reports. The number of cows and heifers that have calved stood at 36.8 million at the beginning of the year, the lowest count since 1941.
Price spikes in ground beef will hurt small chains and independents quicker than large chains, which contractually lock in prices for half- or full-year terms. McDonald’s Corp. CFO Peter Bensen told analysts last week that the “full year outlook for the increase in our U.S. grocery basket remains at 1.5% to 2.5%.”
But earlier this week, Texas Roadhouse CFO George Price Cooper gave analysts a different story from the perspective of a steak chain. “For 2013, we expect food cost inflation of 6.5% to 7% with the third quarter coming in at 7% to 8%, and the fourth quarter in a range of 6% to 7%,” said Cooper. “There’s still some flux in these numbers, given the fact we are on the market for about 20% of our beef needs, as well as the majority of our produce and dairy needs. The good news is that while it appears we are weathering our second straight year of 6%-plus food inflation, we feel much better about 2014 at this time.”
Consumers have shown themselves to be fairly tolerant of reasonable menu-price increases (since they see supermarket prices rise), but Technomic research finds 77% of adult meat-eaters say they would change their ordering habits if menu prices for beef dishes increase. Nearly half (49%) say they would order beef less often. Among burger-loving 18-to-24-year-olds, 60% said they’d cut back on beef. For 43% the answer would be to dine out less often.