By all accounts, Burger King is doing just fine financially. The Restaurant Brands International flagship reported same-store sales growth of 3.6 percent in the third quarter. Systemwide sales rose 11.2 percent and net restaurant growth came in at 6.6 percent. But if you look around the industry at the chain’s top competitors, there is one area it seems to be lagging behind: delivery. CEO Daniel Schwartz said that’s about to change.
“We actually explored delivery several years ago in the U.S. prematurely,” he told The Associated Press. “But it's something that we are focused on now. We're working on it. We're doing delivery in some of our Popeyes restaurants in the U.S. and Canada already.”
Burger King was definitely ahead of the curve when it began testing BK Delivers in late 2011. It grew into large cities, including San Francisco, Washington, D.C., Los Angeles, Chicago, Oakland and San Jose, California, Miami, Brooklyn, New York, Las Vegas, and Houston.
BK Delivers allowed guests to order from menus online or by calling a toll-free number. The brand also unrolled proprietary thermal packaging technology to ensure food arrived hot and to separate cold from warm items. Being ahead of the game, though, isn’t always a great thing. For one, delivery simply wasn’t as streamlined as it is today. You can thank mobile apps and ordering for that. Not to mention the rise of third-party vendors, review sites, and just the overall consumer sentiment related to fast food delivery.
McDonald’s and Wendy’s are proving that, with McDonald’s offering the service via UberEats to thousands of U.S. restaurants (8,000 or so globally). Wendy’s just announced its plan through DoorDash to deliver food nationally to 48 major markets. Taco Bell also recently unveiled its goal to step up digitally with self-serve kiosks and expanded delivery. The Mexican chain currently offers the service to more than 1,000 restaurants in 50 markets with DoorDash as well. Panera Bread is a fast casual trailblazer, and said in April it expects to hire 10,000 news employees just committed to delivery.
Burger King appears to have taken the wait-and-see approach before blasting out its latest iteration. The chain will have plenty of case studies from competitors to decide how to move forward.
Schwartz spoke about some other hot topics at RBI, including its continued integration of Popeyes into the company’s portfolio. The 2,800-unit chicken chain’s same-store sales declined 1.8 percent in the third quarter versus the prior-year period, including 2.6 percent in the U.S. Popeyes reported average restaurant sales increases each year since 2008 heading into the RBI sale in February, as well as average revenues around $1.4 million per U.S. restaurant. In October, Schwartz said “continued competitive activity” was slowing sales to a degree, and that Popeyes would ramp up its value focus to take back share. Popeyes debuted a $5 box in September, and then unveiled a 10 for $10 chicken deal where guests can get 10 pieces of chicken or handcrafted tenders for just $10.
Schwartz told the AP that Popeyes was an ideal target for RBI thanks to its overseas potential. “If you look at some of the peers in that space, the number of restaurants they have outside the U.S. is quite large. Popeyes is in around 30 to 40 countries, which is very small,” he said, adding that Asia, and China specifically, where there are no Popeyes currently, is a priority for the future.
Schwartz also touched on Tim Hortons, another brand that has faced some recent challenges, especially in the U.S. The brand reported same-store sales growth of 0.3 percent—an improvement from the 0.8 percent drop in the second quarter. Tim Hortons also noted a sales increase of 0.6 percent in Canada but a decline in the U.S.—a market it has struggled to find footing in.
Schwartz told the AP that Tim Hortons plans to open in Indianapolis, Cleveland, and internationally in the Philippines and the U.K. “It takes time and we've been expanding in the U.S.,” he said.
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