TORONTO — Burger King will keep promoting its Whopper as a premium menu item even as inflation may have some consumers seeking value items.
“For the consumer, the inflationary environment is certainly something that's top of mind,” said José Cil, chief executive officer of Burger King’s parent company Restaurant Brands International Inc., in a May 3 earnings call. “We've seen food at home inflation being under a little bit more pressure over the last six months than food away from home, which creates, for the restaurant space, a more positive environment.”
As 2022 began Burger King kept the Double Whopper Junior in a $5 meal but removed the Whopper from core discount offerings. The chain also offered the Whopper Melt at a price point between the Whopper Junior and the Whopper.
“We launched with three delicious flavors and added the product to our flame-grilled selection for a limited time,” Cil said. “Results demonstrate that the offering has strong messaging with high-quality ads, performed well on our digital platforms and proved to be incremental to our burger platform at a healthy price point.”
Comparable-store sales for Burger King rose 10% in the first quarter ended March 31. Comparable-store sales slipped 0.5% in the United States, but jumped 20% internationally as the markets of France, Spain, Germany, Korea and Brazil generated double-digit growth.
“We made good progress finding the right way to localize the Burger King experience,” Cil said. “In some cases, that could mean developing products that lean on local culture, such as meats and cheeses specific to an area, while, in other cases, it could mean highlighting imported food and beverage products, if that's what our guests are asking us for.”
RBI owns a 15% stake in a joint venture in Russia, which had 820 fully franchised Burger King restaurants at the end of 2021. RBI suspended all corporate support for the Russian market after Russia invaded Ukraine in late February. The Russian Burger King restaurants in the quarter had an estimated negative impact of $12 million, or 2.6%, on RBI’s year-over-year organic adjusted EBITDA growth.
Comparable-store sales for Popeyes slipped 3% globally.
“Continued staffing challenges resulting in lower year-over-year store hours, competitive pressures, specifically around last year's chicken sandwich launches, and the lapping of 2021 stimulus benefits resulted in a 4.6% year-over-year decline in home market comparable sales,” Cil said.
Comparable-store sales for Tim Hortons increased 8%.
“We also saw accelerating underlying sales trends throughout the quarter as restrictions eased across (Canada) and mobility increased,” Cil said of Tim Hortons. “In fact, comparable sales at our super urban locations grew nearly 30% year-over-year during the quarter with each month growing faster than the prior.”
Firehouse Subs, which RBI acquired last December, had first-quarter sales of $272 million with comparable-store sales up 4.2%.
Companywide, Toronto-based RBI had net income of $270 million, equal to 59¢ per share on the common stock, which compared with $271 million, or 59¢ per share, in the previous year’s first quarter. Total revenues increased 15% to $1.45 billion from $1.26 billion.