Aug. 31, 2010
By Jason Rummer
This month, Burger King will start to serve "pizza," or something like it – a 2,500-calorie, pizza-flavored burger sold at its Whopper Bar concept in New York's Times Square. Are they crazy? Don’t they remember that McDonald's tried the same thing and failed? For McDonald's, failure was not just once. It was a three-time fiasco, burning up a lot of corporate dollars and wasting focus outside of their core competency.
Now, I know this is only one product at one of eight Burger King spinoff concepts known as the Whopper Bar. But I also know that the parent company could use these concepts as test markets. So Burger King, hear this: McDonald's, your bigger burger brother, tried pizza in the Madison and Milwaukee markets in the late ‘70s and then again in over 500 of its stores from 1991 until 1997. It still failed to find a regular customer for its product. McDonald’s even went as far to prove itself in the pizza arena a third time by purchasing a top-level Midwestern pizza chain, adding 100 or so stores, and when failing to meet profitability expectations, it sold the company back to its founding family. And guess what? The originators of the pizza concept, a family of serious pizza people, closed a bunch of the McDonald’s-inspired locations and have turned the company back around to prosperity. How do I know? It was Donatos Pizza out of Columbus, Ohio. I worked there from ’92 – ‘96 and established the franchise operations system for the company. The Grote family owned it then before the Mickey D’s purchase, and now own it again. Great people, great concept.
The three McDonald’s failures are cases in points that you would think the CEO (or at least the CMO or COO) of Burger King would consider as reason not to invest into modifying their burger brand just to turn a buck. If KFC’s “Double Down” splash was inspiration, at least that fit with the brand – it was chicken! Even so, the stunt hasn’t helped that slippery-saled concept. The moral? Stick to your core competencies, end of story. Do what you do great, and do it better than anyone else. If anything, simplify your menu and stop driving your franchisees crazy.
BK franchisees, were this product to go national, would you really be happy about retrofitting your kitchens (which are probably tight anyway with new, expensive equipment) that your operating teams will need to learn to manage and clean every night, in order to maintain your standards of excellence and remain profitable? I don’t think so. Are the gross profit margins of pizza really that high in comparison to burgers’ that this menu deviation makes any sense? What is the ROI of this investment? Who is really profiting from it? BK franchisees, ask your corporate people these questions and demand answers.
Pizza People, please do not be overly concerned about this intrusion of another competitor in your already fractured market. If anything, this stunt might help sell another pizza for you by bringing consumer attention back to pizza (or at least making it look healthy in comparison to BK’s version!). And in the rare instance you were itching to, please don’t spend your already precious marketing dollars trying to compete with this bloated elephant.
EVERYONE: Stay focused on your core competencies, improve on them and your people, and focus on and thank each and every customer you have for enjoying one of your products. If you are reading this article and selling burgers, you should do the same.
Jason Rummer is a 30-year restaurant chain executive with experience in development, operations, and marketing with two national and three regional pizza chains, and has also provided consultation to a number of small companies. To find out which ones, visit him on LinkedIn.