Mac n’ Cheetos may have been one of the most talked about items in recent fast-food history, but they didn’t save Burger King in the second quarter.
On Thursday, Burger King reported that same-store sales at US restaurants open at least a year fell 0.8%, with global same-store sales growing by 0.6%. Total profit for Burger King and Tim Hortons parent company Restaurant Brands International, however, beat expectations at 41 cents a share, compared to analysts’ estimated 35 cents, according to Bloomberg.
According to executives, Mac n’ Cheetos — which debuted as a limited-time item in June — were a major success for the chain. The company reported that the item earned 3.2 billion impressions, making it one of the most covered product launches in the fast-food chain’s history. But impressions do not translate into sales.
Burger King’s sales slump is part of a wider problem in the fast-food business, with McDonald’s, Yum! Brands, and fast-casual chains like Habit Burger also reporting sales slowdowns. Consumers are increasingly choosing to eat at home, despite aggressive discounting across the fast-food industry.
Despite the sales slump, Burger King executives said they plan to continue the strategy of launching high-impact new items, such as Mac n’ Cheetos and Grilled Hot Dogs, which the chain debuted in the winter.
“We did see things slow down a little bit, but the same strategy that we’ve had in place for the last five years is going to continue,” Restaurant Brands International CEO Daniel Schwartz said in a call with analysts. “There’s no silver bullet. It’s about delivering great guest experience.”
Further, executives defended Burger King against the idea that the chain — which has managed a comeback since 2011 by focusing on launching fewer items — was adding too many wacky items to the menu in 2016.
“What we don’t want to see is kind of a variety of new small products. To the extent we have an existing platform, innovating around that platform, it’s ok,” said Schwartz. “When I look at the innovation pipeline coming down the road, I feel good that the platforms are going to be few and — obviously — we’re planning on them being impactful.”
In other words, Burger King isn’t finished with launching quirky new menu items to stand out in the struggling fast-food industry. The company is going to be selective — but Mac n’ Cheetos are just the beginning.
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