Wendy's, Burger King order up some new looks
For Burger King, the second-largest U.S. hamburger chain after McDonald's, customers will be treated to redesigned restaurants with a flashy red-and-white color scheme.
And Wendy's, the third-largest hamburger seller, is seeking to lure new customers with one of its biggest advertising campaigns ever, according to the Wall Street Journal.
So why are these two burger behemoths making changes now? The reason may lie in dwindling consumer appetite for spending money on dining out given the recession and a stream of dismal news about the economy.
Burger King (BKC) suffered a decline in same-store sales of 2.4% during its fiscal fourth quarter, meaning that restaurants open at least a year saw a slip in demand. The reason why? The company blamed consumers choosing to eat at home and discounting by its competitors.
Wendy's suffered from similar problems, with same-store North American sales slipping 1.2% during the second quarter. The new campaign comes after Wendy's/Arby's Group (WEN) hired a new advertising firm in July as part of a turnaround for the Wendy's brand.
It's no secret that Wendy's has struggled with its message following the 2002 death of founder Dave Thomas, who had served as the chain's pitchman. Last year, the chain ended an eight-month old campaign featuring men sporting red wigs with braided pigtails, a tip to the image of red-headed Wendy in its logo, which the company acknowledged was a love-it-or-hate-it message.
The new ad campaign will cost the company about $75 million in the forth quarter, the Wall Street Journal reported. According to Wendy's, the slogan will be "You know when it's real," a message designed to tout the freshness of the chain's food. The premiere TV commercial will appear on ESPN's Football Friday night programs including Sportscenter and NFL Live.
"You'll see more pressure on advertising as our economic climate continues to be troubling," said Darren Tristano, executive vice president at Chicago-based restaurant consulting firm Technomic.
Part of the reason why fast-food chains are revamping their looks and messages is because of competition from the casual dining segment, such as restaurants including Panera and Five Guys Burgers and Fries, Tristano said.
The idea of freshness is designed to appeal to consumers eager for food that isn't precooked and beef that's fresh instead of frozen, Wendy's says. And the chain might just be tapping into anxieties many consumers have about the safety of food, following food-borne illness outbreaks and the New York Times' recent article on the dangers of hamburger.