Dive Brief:
- Burger King’s U.S. comparable sales declined 0.4% during the third quarter, Restaurant Brands International CEO Joshua Kobza said Tuesday during an earnings call. Net restaurant growth declined by 1.6%, resulting in a 1.5% decline in systemwide sales.
- Sales were softer than expected during the quarter due to a difficult consumer environment over the summer and softened performance of its limited time offerings. The company’s Fiery menu, didn’t “cut through all the value messages in the market,” Kobza said, adding that it was less impactful compared to its Royal Crispy Chicken Wraps launched last year.
- Burger King saw its gap in performance versus the industry “take a slight step back,” starting in August after several quarters of outperforming its QSR burger peers, Kobza said.
Dive Insight:
This past summer was filled with various value and LTO offerings across the QSR segment, including a $5 Meal Deal from McDonald’s that helped drive traffic and sales growth for the Golden Arches during the third quarter. Amid the competition, Burger King has struggled to stand out.
Last year, Burger King offered Royal Crispy Chicken Wraps for $3, whichthat helped drive sales during Q3 2023. Over the summer, Burger King launched five different spicy items as part of its Fiery menu and offered its own $5 meal, but Kobza didn’t mention the impact of the latter offering.
“We do our best when we've got good value offerings,” Kobza said. “We have things like the $5 Your Way that we’ve had for a while, but we also pair that with relevant innovation and a big focus on the Whopper.”
Burger King U.S. comparable sales
Despite the quarterly decline in comp sales, Burger King is heading in the right direction, and the chain is in better shape than it was when it launched its Reclaim the Flame program in September 2022, Kobza said.
Burger King continues to gain momentum as its remodel program helps drive franchisee profitability and sales. Remodels continue to see mid-teens increase in sales, and four-wall EBITDA reached $205,000 at the end of 2023, far above Burger King’s initial goal of $175,000, Kobza said. The brand is now on its way to reaching $230,000 by 2026 with its eyes set on $300,000 by 2028.
The fourth quarter also started well. Burger King’s performance improved in October with the launch of its Addams Family meal on Oct. 10, which helped the U.S. segment again outperform its burger QSR peers on same-store sales — though McDonald’s sales performance in the month was hurt by an E. coli outbreak.
The Addams Family promotion included Wednesday’s Whopper with a purple potato bun that helped drive “the business to perform the best it has in a fair while here,” Kobza said.
“That shapes a bit of our thinking as we look into Q4 and really into next year,” Kobza said. “We do need to have good value offerings. We think we have something right now that works really well for the business. We may tweak it slightly into 2025, but I think we’re pretty happy with it overall.”
