After years of declining business, Arby’s and Burger King are coming out on top.
Arby’s just reported same-store sales growth of 7.6% compared with last year’s second quarter. Burger King’s sales are up an impressive 7.9%.
Both restaurants’ sales growth far exceeded the industry average of 2.3%, according to NPD Group. McDonald’s same-store sales fell 0.7% in the second quarter.
Here’s what Arby’s and Burger King are doing right.
Executives say business is booming thanks to its “we’ve got the meats” marketing campaign and successful redesign of stores.
The company has reported same-store sales growth for 18 quarters.
“It’s been a process,” Arby’s CEO Paul Brown told Business Insider in February. “We stepped back and made a conscious decision to differentiate ourselves in the marketplace.”
Arby’s has the food quality of fast-casual restaurants, but the price point and convenience of fast food, Brown said.
This has allowed the brand, which has nearly 3,000 stores, to reach fans of both categories.
The brand slow cooks and hand slices its roast beef for sandwiches every day. Arby’s also offers a variety of deli sandwiches.
“We’re in a unique position because consumers perceive our food as high-quality, but we are routinely priced below fast-casual competitors,” Brown said. “This gives us an expanded base of customers.”
In two years, Arby’s has added just one new item to its menu — the beef brisket, Brown said.
The company keeps things exciting by retooling the meats, cheeses, and breads it already has into new combinations.
This helps prevent food waste and protects workers from becoming overwhelmed.
Focusing on the core product has benefitted Arby’s at a time when McDonald’s overloaded menu is said to be hurting business.
The second-largest burger chain credits poultry for a surge in sales.
Burger King brought back Chicken Fries, a menu item it discontinued in 2012, a move executives claim brought back many consumers.
Burger King’s young management team, led by 30-something CEO Daniel Schwartz, is impressing analysts at RBC Capital Markets.
“Whopper aside, we see few similarities between the Burger King of 2010 and the Burger King of today,” the analysts write.
Executives made franchising easier for overseas restaurants, leading to rapid growth.
By outsourcing the operations part of its business, Burger King has been able to retain more cash for investments.
The company pared down the US menu and got new equipment to speed up operations.
Burger King also doubled down on its marketing strategy to appeal to young and cash-strapped customers.
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