Burger King's chicken sandwich marks a shift in chain's menu strategy away from promotions

Burger King's new chicken sandwich "Ch'King" is seen on display in New York, NY, May 19, 2021.

Aleksandra Michalska | Reuters

When Burger King launched the Ch'King nationwide earlier in June, it wasn't just releasing a new chicken sandwich.

It was also marking a shift in the burger chain's menu strategy, according to Jose Cil, chief executive of Burger King's parent company, Restaurant Brands International.

"Our focus on menu is shifting from promotional to foundational, doing the hard work on the core menu offering to make sure that we have great-tasting food that our customers can rely on, day in and day out," Cil said at the Evercore ISI Consumer & Retail Summit on Thursday.

He noted that average unit volume of a Burger King location rose from roughly $1 million in 2011 to $1.3 million by 2018. The burger chain achieved that by going after "low-hanging fruit," he said, such as deals and limited-time menu items. Cil served as president of Burger King from 2014 to 2019, when he was handed the reins of Restaurant Brands.

"I was at the helm of it, so I'm fully responsible and owning up to the outcomes of that, but we've been very focused on promotional work," Cil said.

In the burger chain's first quarter this year, it reported U.S. same-store sales growth of 6.6%, helped by last year's weaker results after lockdowns began hitting its sales.

But to unlock the next level of growth, the company is going to work on the foundations of the business, including its core menu. For example, it took two years to develop the Ch'King, perfecting the handbreaded chicken sandwich's recipe and ensuring that making it is as easy as possible for restaurant workers, Cil said.

"I think the development of that product and how we've launched it should be an indicator of how we're thinking about and reprioritizing the business at Burger King," Cil said.

Burger King's sister chain Popeyes has found great success with its chicken sandwich. For 1½ years after its 2019 launch, the fried-chicken chain reported double-digit quarterly same-store sales growth, fueled by the strength of the sandwich.

Shares of Restaurant Brands have risen 11% this year, giving it a market value of $31.4 billion. Domestic sales at its brands Burger King and Popeyes have bounced back quickly from the pandemic, but at its Canadian coffee chain Tim Hortons, sales are taking longer to recover as Canada extends its lockdowns.

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