Burger King CEO says US marketing is under spotlight as sales lag
Burger King reported disappointing sales in the second quarter, with chief executive Jose Cil laying the blame on marketing efforts that have failed to deliver returns.
Burger King fails to match the sales of rivals McDonald’s and Wendy’s
Despite a strong international performance, the chain’s US sales were down 1.6%. Its frustrations were compounded by McDonald’s and Wendy’s both being up double-digits in the region.
“It’s clear we’re navigating a transition in the US and this quarter’s results reflect that,” said Cil, adding that the fall was primarily due to the “underperformance” of its value menu.
Burger King launched its $1 Your Way menu in December 2019 as a way to put more focus on its core products, such as the Whopper, and create an “everyday platform that consumers can rely on.”
Major marketing efforts to support this strategy included a four-part campaign fronted by award-winning actor Paul Giamatti, which launched in June.
Just a few months later it was back on screens, this time with the celebrity-packed ‘Keep it Real’ advertising push featuring Nelly, Anitta and Lil Huddy, who created meals based on their favorite items (a format first devised by rival McDonald’s).
However, Cil admitted the significant marketing spend ploughed into this strategy has so far failed to realize an increase in sales.
“Two of our big campaigns during the quarter [were] unable to offset [headwinds]. We saw a continued gap relative to our peers,” he said.
“We’re keenly aware of this gap and are actively building an actionable long-term plan to address [this]. We know we have an iconic brand with well-tenured, focused franchise operators, but we also see clear opportunities across operations, digital menu and image that can work together to reclaim market share and drive long-term sustainable growth.”
But before it can fully establish this plan, Burger King has had to deal with a revolving door of marketing hires. In April global chief marketing officer Fernando Machado departed. He was replaced by Ellie Doty, who took on responsibility for all marketing in the US and Canada, and Paloma Azulay, who took on a global chief brand officer role. But, just months into the job, it was announced Azulay would be departing.
Pressure is now on Tom Curtis, who joined as president of Burger King US and Canada in August and will now take charge of this new marketing direction.
Cil said Curtis has spent the past two months reviewing its operations and gathering feedback on its menu, digital capabilities and marketing.
“What’s clear from his initial observations is that we have a great brand and assets to build from, but we need to double down on putting the guest experience at the center of all of our efforts,” said Cil. “Tom and the team have been hard at work in partnership with our franchisees to build a focused plan to reclaim our market share and put us on track for long-term sustainable growth.”
So far that’s led Burger King to ditch the paper coupons used for in-restaurant offers – which it acknowledged had become irrelevant among younger diners – and instead encourage people to adopt the ‘Royal Perks’ digital platform.
Cil declined to comment on the level of marketing investment it was looking at for the coming quarters, instead saying it has prioritized “building out a strong leadership team.“