Chain Leader

Lane Cardwell

In the Shadow of the Whopper
June 13, 2008

I grew up in Miami two miles from the Burger King corporate headquarters. McDonald's had a good presence, but it was clearly a Burger King town. It was inevitable that I became a Burger King customer. I later moved to Dallas, and a few years later was working for Norman Brinker at Steak and Ale. I don't mean that I actually reported to him. It's just that everyone said they worked for Norman. Steak and Ale was owned by Pillsbury at that time. Another restaurant chain that Pillsbury owned was called Burger King. Yup. I had moved halfway across the country and still had close ties to the Whopper.
 
The CEO of Burger King at the time, Don Smith, left in 1980 and Pillsbury made Norman responsible for the Burger King chain, as well as Steak and Ale/Bennigan's. Norman immediately began shaking things up, and challenged the existing way of doing business. By 1982 Jeff Campbell and Kyle Craig had orchestrated the Battle of the Burgers. This groundbreaking attack on McDonald's riveted the country. Burger King actually ran ads saying that surveys proved that Burger King's Whopper was preferred to McDonald's. McDonald's sued, the ads kept running, sales at Burger King went up, and then a truce was declared. Within two years the profits at Burger King had doubled, Jeff was firmly in place as CEO, and Kyle Craig was later made president of Steak and Ale.
 
I bring up this historical note because it was the last time in a long time that Burger King had anything to celebrate. By 2004 they had 9 CEO's in a 15 year period.  From 1984 to 2004 is a long dry spell for a major national brand. Oh, to be sure, there were the occasional periods of upswings, followed by sustained periods of downswings. If there was ever a brand that had more promise that failed to live up to it, I can't think of what it would be. Burger King always reminded me of the smart teen that everyone loved who could never quite pull it together as an adult. Perpetually underemployed.
 
Burger King Holdings recently posted 16 quarters of positive comp sales, and a record high annual unit volume. They have revived the brand, and are living up to their place as the world's second largest burger chain. 
 
I stopped being a Burger King customer a long time ago. I loved the taste of their flame broiled burgers, but couldn't tolerate the inconsistencies of the experience. Recently, I ventured back to Burger King to see if there was a reason for their return to sales glory. The food quality is back, the experience is better, and their new products make sense. They are definitely on a roll, and their sales growth, in the face of McDonald's successes, is a real victory.
 
I have always equated the differences between QSR and casual dining to the differences between tennis and golf. With tennis, there is a direct competitor. One side will get the point, the other will lose it. With golf, you play along side other competitors, but do not directly compete for the point. Playing a round of golf skillfully does not directly affect the other player's game. You win by playing your game better, not by beating others.
 
QSR is similar to tennis in that there are few competitors, and your success is often the cause for another's failure. Casual dining has many competitors. Too many in most cases for there to be a cause and effect from the performance of one to hurt another. Therefore, if this analogy holds, the success of Burger King, while McDonald's has also been doing well, is doubly rewarding.
 
I admire those who have succeeded in the QSR world. It is a fast-paced game that rewards the bold, and those who strategize with their eye on the prize. I am glad to see Burger King returning to a prominence that it had sidestepped for many years, and coming out of the shadows.

Posted by Lane Cardwell on June 13, 2008 | Comments (2)