Burger King’s sales have grown as it works to turn around its business. But it still has a problem: Not enough customers.
In the second quarter ending on June 30, sales at Burger King’s US restaurants open at least 13 months jumped 8.3% year over year. Globally, including in the US, sales at Burger King restaurants open at least a year grew 10.2%.
But much of the sales growth in the US was driven by people spending more when they actually bought food from a Burger King, not because more people were coming through the door. As US consumers pull back on spending, that could be a problem.
Fewer Burger King customers came in over the past three months compared to last year, noted Josh Kobza, CEO of Burger King parent company Restaurant Brands International
(QSR), during a Tuesday analyst call discussing quarterly financial results. RBI also owns Tim Hortons, Popeyes and Firehouse Subs.
“We are still not in positive territory,” he said, while noting that trends have been improving. “Growth in traffic … is one of the most significant near-term opportunities we see for the brand.”
Last year, Burger King announced a plan to turn its business around, which includes a $400 million investment in improving the brand’s fortunes: $250 million to updating restaurant tech, kitchens and remodeling, and $150 million to advertising and digital products
So far, the company has spent about $32 million on ads and its digital offerings, as well as $35 million toward remodeling and other physical improvements.
One part of the plan has hinged on getting people to try a Whopper, Burger King’s signature hamburger, again.
“What we really want to do in the short term is reintroduce America’s love affair with the Whopper,” Tom Curtis, president of Burger King North America, told CNN in the spring. That includes making sure workers are well trained in making burgers and ensuring kitchens support consistency and ease of preparation, plus marketing campaigns that highlight the Whopper.
Those ads and other Whopper-specific promotions helped boost sales in the quarter, Kobza said Tuesday.
Marketing focused on how customers can customize Whoppers, a limited-edition Spider-Verse Whopper and the Whopper Jr. deal “drove higher average tickets and attracted younger guests.”
The next step is bringing restaurants up to date.
In order for customers to walk through the door, Burger King locations need to look modern, according to executives.
“We’re going to do really high quality remodels … you should see that becoming an increasingly important part of the equation later this year and into next year,” Kobza said.
“We need pretty much every Burger King all across the country to be modern, convenient and competitive with with all of the other concepts out there that have new and modern buildings,” said Kobza.
In recent years, fast food chains have unveiled new designs, many of them following a similar blueprint: Quirky is out, sleek is in, with a higher focus on in-restaurant tech and streamlined designs.
For Burger King, one way to update restaurants is by focusing on restaurant tech, like ordering kiosks.
“We’re spending a bit more time on kiosks,” Kobza said. “We’ve done another pretty big test here in our company restaurants. And we’re seeing a much better guest reception to kiosk than we might have seen they five to seven years ago in the US.” Burger King is planning to test kiosks more broadly across the US.