A Glimpse At The United Corporations of America's Future
The below article shows how a Corporation (PERSON) responds to an economic slump. (By frantically trying to figure out how to get customers back to stuff unhealthy food products down their unwitting throats again.) It’s a peek at what We the Non-Corporporation "People" are in for. Plummeting sales make them scramble to come up with new ideas to bring their ever loving profit margin back up to greed speed. Proving (as if we didn’t know) that profits rule and the Corporation type "People" care about little else. So, in the future when the Corporation "People" start buying our politicians... (the ones who they can readily scratch their backs with some scratch ($$$) and get them elected so laws can be changed in a Corporation’s favor, like lowering quality of already crappy food because FDA will surely be in their pockets also and recalls will be a thing of the past). We the Non-Corporation "people" will be left holding the Burger King and McHappy Meal bags. Welcome to the new Robert's vision of the United Corporations of America! thinkingblue
As Sales Drop, Burger King
Draws Critics for Courting 'Super Fans'
by Julie Jargon
Monday, February 1, 2010
WALL STREET JOURNAL
ŠThe Associated Press
For five years, Burger King Holdings Inc. was on a roll,
successfully courting its "super fans" -- 18- to
34-year-olds who account for half of all visits to Burger King
restaurants.
Thanks to high unemployment and healthier eating habits, those
super fans haven't been so super lately. Burger King has felt the
impact more acutely than its main rival, McDonald's Corp., whose
sales are growing.
As Burger King prepares to report earnings this week after two
straight quarters of same-store sales declines, the question is
whether the chain has relied too heavily on customers that may be
permanently changing habits.
Former super fan Noah Rubin says he has. The 28-year-old Seattle
man used to wolf down bacon cheeseburgers three or four nights a
week at Burger King, Jack in the Box and local bars. But he and
his fiancee started cutting back last year after both were laid
off, then found jobs at lower pay.
Now they cook at home using organic vegetables and dine out only
on weekends. Mr. Rubin figures he is saving more than $100 a week
by eating fewer burgers. "I don't think we'll go back to
eating out as often as we used to," he says. "We always
used to talk about eating at home more, and now that it's
happened, we've found that we really enjoy it."
Burger King's same-store sales in the U.S. and Canada declined
4.6% in the three months ended Sept. 30, while McDonald's posted
U.S. same-store sales growth of 2.5%. North American same-store
sales at Wendy's, a unit of Wendy's/Arby's Group Inc., fell 0.1%
in the quarter ended Sept. 27. At CKE Restaurants Inc., parent of
the Hardee's and Carl's Jr. burger chains, company-run
restaurants saw sales decline 3.7% in the quarter ended Nov. 2.
Some Burger King franchisees and industry analysts say the
company's marketing and advertising focus on super fans alienated
women, children and other customers. "Maybe catering to the
super fan was the correct strategy to kick-start the business,
but maybe they relied on that for too long," Morgan Stanley
analyst John Glass says.
Brian Gies, Burger King's vice president of marketing impact,
says, "There's no question that, broadly speaking, this
recession probably will change the way many people will spend
going forward. We can't quantify what the impact will be for
fast-food hamburger restaurants, but we're on the lower end of
the affordability spectrum, and we stand a pretty good chance of
remaining part of the super fans' repertoire." (continued
below or...)
MORE HERE
To keep those customers coming, Burger King last year started
offering a double cheeseburger for a dollar -- to the chagrin of
franchisees, some of whom sued the company, claiming the price
reduction cut their profits. Mike Kappitt, Burger King's senior
vice president of global business intelligence and strategy, says
the company is pleased with the cheeseburgers' sales and plans to
continue courting super fans.
Six years ago, after years of slumping sales, Burger King decided
to focus on the group that spends the most money at its
restaurants. These young men and women visit fast-food burger
chains on average almost 10 times per month, the company says.
Burger King tried to distinguish itself from rivals by addressing
young men, in particular, like "the cool uncle who tells you
how it is," says John Schaufelberger, Burger King's senior
vice president of global product marketing and innovation.
The chain ran irreverent television and online ads featuring its
big-headed King character, which some people found cool and some
found creepy. Some ads offended Hindus, Mexicans and women. An
advertisement for Burger King's Texican Whopper featuring a small
wrestler dressed in a cape resembling a Mexican flag drew the ire
of Mexico's ambassador to Spain. The company also drew fire for
its "SpongeBob Square Butts" ad, which featured the
King Mascot dancing alongside women with squared-shaped butts.
Franchisees pleaded with Burger King executives to woo more
mothers and children by toning down the ads and bolstering kids'
and breakfast offerings.
"We had multiple marketing meetings where we bemoaned that
our kids' meal sales had dropped dramatically, and that we didn't
have a dessert program, and the company said, 'This is the way
we're doing it,' " says Julian Josephson, who owns 40 Burger
Kings in the West and Southwest.
Company officials acknowledge some franchisees have been critical
but say others have embraced the super fan plan. The chain posted
20 consecutive quarters of same-store sales growth in the U.S.
and Canada through its fiscal third quarter of 2009, which ended
last March 31.
Then came the two quarterly declines. Burger King doesn't
disclose traffic by demographic group, but said in its last
quarterly earnings release that the decline was "driven by
continued adverse macroeconomic conditions, including record
levels of unemployed and underemployed workers, especially super
fan customers."
David Tarantino, restaurant analyst with Robert W. Baird &
Co., is expecting Burger King's global same-store sales to be
down 1.8% in the latest quarter and for the company's same-store
sales in the U.S. and Canada to be down 3%. That would be a
slight improvement over the last quarter, thanks largely to sales
of the $1 double cheeseburgers.
On average, 18- to 34-year-olds went to fast-food chains about 13
times per month from January to September 2009, down from almost
19 times per month in 2006, says market-research firm Sandelman
& Associates.
The economy isn't the only culprit. People 18 to 34 cut their
consumption of fast-food meals from November 2006 to November
2009 while increasing the number of meals they ate at fast-casual
chains, says Bonnie Riggs, restaurant industry analyst at
market-research firm NPD Group.
"Young people are looking for healthier options, or what
they perceive to be healthier options," she says. "Do I
think they'll come back to fast food when the economy improves?
Yes...but will they visit as often? I'm not so sure."
Jason Carpenter, 24, of Tinley Park, Ill., says he used to visit
burger chains a few times a week until early last year. "I
realized it was pointless to do all this exercising and then go
and eat all these burgers," says the benefits programmer for
a consulting company.
Now he cooks at home more, and when he does go out, he favors
sandwich shops or fast-casual chains that he says offer healthier
food. "On occasion, I'll hit Wendy's or McDonald's," he
says, "but I try to stick with Subway or Panera."
Let's keep our heads,
while we continue to watch THE
THEATER OF THE ABSURD!!! thinkingblue