First Look

Fast food goes 'bold' with innovative menus as spring sales dip

Burger King is the latest fast food chain to release a not-so-exciting sales report this summer, but the company, like others, is innovating its ingredients and menu in response.

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    In this April 25, 2013, file photo, a car stops at the drive-thru at a Burger King restaurant near downtown Los Angeles. On Thursday, Restaurant Brands International, which owns Burger King, reported a slight dip in sales for the United States and Canada.
    Nick Ut/AP/File
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The company that owns Burger King announced lackluster sales on Thursday, the latest in a series of such announcements from the fast food sector.

Dramatic changes in American taste buds are requiring some dramatic shifts for the traditional kings of fast food, as chains try everything from all-day breakfast to cage-free chickens to lure more food-conscious consumers back into burger joints.

Although it did well in international markets, Restaurant Brands International, which owns Burger King and Tim Hortons, saw a 0.8 percent sales dip for Burger King in the United States and Canada during the second quarter. This came a week after Dunkin' Donuts reported a 0.5 percent sales increase, while Taco Bell dropped by 1 percent.

The sluggish sales have made the competitive restaurant industry even more so overall, as chains try to best each other's bids for health burgers or "breakfast wars." Many are adding variety in an effort to best smaller, nimbler specialty chains such as Chipotle and Five Guys. Burger King, for example, recently added an "Egg-normous" burrito, Oscar Mayer hot dogs, and Chicken Fries Rings, and a breakfast burrito with little result, Craig Giammona reported for Bloomberg.

"We did see some softness in the industry," Restaurant Brands chief executive officer Daniel Schwartz told the Associated Press.

He said the loss was short-term and would not alter the company's strategy significantly.

McDonald's has made similar declarations, even as the chain announced that sales had slowed in July, almost a year after the company's all-day breakfast revival, The Christian Science Monitor noted. McDonald's has been hitting the market hard in a variety of ways, including by replacing margarine, corn syrup, and preservatives with ingredients that are considered more natural, as the Monitor's Joseph Dussault noted on Tuesday:

McDonald’s has acquired something of an image problem in recent years. Large-chain fast food is increasingly perceived as unhealthy and overly-processed. Smaller chains, such as Chipotle and Five Guys, have pounced on the opportunity to emphasize their own “natural” or locally-sourced ingredients.

As a result, McDonald’s stocks have behaved erratically. Between 2013 and 2015, MCD shares dropped 7 percent.

July saw the company's first sales fall after a 17 percent jump at the hands of Egg McMuffin and sausage patty lovers, but McDonald's insists it is the breakfast-related jump that shows the future.

"Operational efficiency has actually moved down in the ranks of priority because we want to focus most of all on the food," Lance Richards, the company's vice president of menu strategy, told The Chicago Tribune in January. "There’s an openness to really going after the consumer that’s so refreshing. I think there’s some bright days ahead."

Burger King's owners are similarly optimistic. Despite the dire predictions of market analysts, they say the future of the fast food kings, like their past, is a long one.

"We try not to get too caught up in the macro headwinds," Mr. Schwartz told Bloomberg. "We feel confident we have the right strategy in place."

That confidence – or willingness to experiment, anyway – may be reflected in Burger King's latest creation: a "bold" combination of Cheetos and baked cheese they call "Mac n’ Cheetos," intended "for anyone who ever wished they could eat warm mac n’ cheese like they do a bag of chips."

This report contains material from the Associated Press.

 
 
 

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