Burger King’s announced short-term strategy is to battle soft sales with soft-serve ice cream.
The company announced that systemwide North American same-store sales dropped 5.3% during the quarter ended June 30, 2011. Comp sales were up 6.8% in South America, where the chain’s new owners (and its new global Chief Marketing Officer Flavia Faugeres) hail from, and the rest of the world was +2.2%. Unfortunately, roughly half of Burger King’s restaurants are in the U.S. and Canada (6,550 of 12,336). They need turnaround help.
Burger King Holdings CFO Daniel Schwartz told analysts today that Burger King is focusing on its “four priorities”: marketing communications, menu, operations and image. The hiring of McGarryBowen as lead ad agency checked off the first priority. But what about menu? Well, said Schwartz, Burger King will be adding soft-serve sundaes in September. After the summer.
What about that “bold new menu” reported to be testing by the Miami Herald back in May? The menu with the improved, homestyle burger and the chicken BLT and the oatmeal? Where’s that? It’s in about 100 stores. “We’re 30 days into the test and we’re encouraged by the results so far,” said Jonathan Fitzpatrick, EVP-Chief Brand and Operations Officer. Nothing will be decided until after the test runs its course through year-end.
That puts a whole lot of pressure on the current BK Minis and Ringmaster Whopper (Cananda) promotions and the soft-serve that follows to reverse the downward spiral of North American same-store sales through the second half of 2011, because the cavalry isn’t coming to the rescue soon.