Photo courtesy of Burger King
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Early next month, Burger King’s long-awaited chicken sandwich, now known as âCh’King,â will be available nationwide.
Some observers have not lost sight of the fact that Burger King is owned by Restaurant Brands International, which is also the owner of Popeyes Louisiana Kitchen, which is the chain that started the chicken war with the introduction of its own sandwich in 2019 – the most popular new product introduction in recent industry history.
Burger King’s sandwich is similar to Popeyes’ sandwich and has a similar price, essentially pitting the two chains against each other despite being both owned by the same company.
Still, the impact is unlikely to be significant. The reason has to do with the competitive complexity of the restaurant industry and why people choose one chain over another. There is little evidence that all of these sandwiches hurt the sales of the existing concepts that sell them. And there is more evidence that Burger King himself was hurt by not having a sandwich.
âThey should have done it sooner,â said John Gordon, a San Diego restaurant consultant. “They needed it because McDonald’s and Wendy’s had lunch.”
RBI, formed in 2014 with the combination of Tim Hortons and Burger King, bought Popeyes in 2017 and quickly set out to create a chicken sandwich. This introduction hit restaurants in 2019, generating better quarterly same-store sales in the fourth quarter of this year than any restaurant chain ever. These sales have remained strong even during the pandemic.
This move alone has done more to pit the two chains against each other than anything Burger King has done since then.
Burger King and Popeyes are historically very different. Burger King is a concept of hamburgers with the three main parts of the day that does a large part of its business at lunchtime. Popeyes is a chicken concept that has always sold bone-in chicken and similar items that do a large part of its dinner business. By introducing the chicken sandwich, Popeyes has taken a big step forward in the lunch business. And Burger King once sold a chicken sandwich.
Meanwhile, there isn’t much evidence that all this chicken sandwich development is taking away sales from chains that had previously improved on chicken sandwiches. Room A is Chick-fil-A.
The Atlanta-based chicken sandwich concept saw system sales increase 13% in 2019, the year Popeyes launched its own version. It generated $ 1.6 billion in additional sales in 2020 despite the pandemic – more in absolute terms than any other restaurant chain in the United States that year. Popeyes, it should be noted, generated an additional $ 800 million in revenue last year, according to Restaurant Business’s sister company, Technomic.
Further evidence came in the first trimester. McDonald’s and KFC, direct competitors of Popeyes, generated strong sales with their own chicken sandwich introductions. Despite this competitive intrusion, the company was able to report a slight increase in same-store sales, despite a 29% increase in the same quarter a year ago. Wendy’s, which introduced an improved version last year, has actually seen an increase in sales of sandwiches.
Meanwhile, look back to the fourth quarter of 2019 when Popeyes delivered 38% same-store sales growth. McDonald’s at the time reported 5.1% of same-store sales and Wendy’s, which had jumped on the Popeyes-powered chicken social media band, reported 4.5%. In both cases, the numbers were similar to the third trimester, when Popeyes’ chicken sandwich was less of a problem.
Burger King, on the other hand, experienced a slowdown – to 0.6% in the fourth quarter of 2019 from 5% in the previous quarter. Other factors may well be at play. But that slowdown coincides with the introduction of the sandwich by Popeyes and Burger King has since underperformed.
In the meantime, 50 restaurant chains ranging from Taco Bell to Red Lobster have introduced new chicken sandwiches or their own unique take on the product, including McDonald’s and Wendy’s. People eat more chicken sandwiches and clearly appreciate innovation.
All of this means that Burger King probably has an obligation to introduce its own version, just to keep pace with a market that has moved so quickly into high-end chicken.