Le Whopper duels le Big Mac in Burger King France return
Once a week, Vincent Bonnaire drives 15 miles from his office in Aix-en-Provence to Marseille airport in the south of France. Hes not catching a flight. He just wants his weekly Whopper fix.
Bonnaire, a 28-year-old electrical equipment salesman, can once again enjoy his favorite burger, the Double Cheese Bacon, in France. After a 15-year absence -- during which rival McDonalds captured almost half of the 9 billion-euro ($12 billion) French fast-food market -- Burger King Worldwide Inc. (BKW) returned to France in December. In the coming months, it plans to open its second outlet, off a motorway in Reims.
Burger Kings first French foray was haphazard, and ended with a quiet retreat after shuttering its 39 restaurants. This time, Burger King has hedged its bets, sharing costs with Italian restaurant operator Autogrill SpA. (AGL) At stake is one of McDonalds biggest markets based on sales and profits.
To beat McDonalds and European rival Quick, which have gobbled up the best locations and tailored their menus to French tastes, the Miami-based chain must emphasize the flame-grilled burgers that have won passionate fans, according to Michael Schaefer, an analyst at researcher Euromonitor International.
They have the name recognition, that weird cult following in France, Schaefer said. Thats kind of half the battle. The best thing for Burger King right now is to keep it simple and focus on things people know.
Another failure in France could sour investors on Burger Kings shares, which have advanced about 20 percent from the company's opening share price on its June 20 return to the New York Stock Exchange, after owner 3G Capital Inc. completed a merger with a company co-founded by activist investor William Ackman. The stock has outpaced both McDonalds and the Standard & Poors 500 index since then, bolstered by an international push that has taken the chain into places as far-flung as Siberia and Peru.
A setback in France would be a very big blow for the organization and for the brand, said Darren Tristano, executive vice president at researcher Technomic Inc. in Chicago.
Burger King is saying little about its plans in France, where the fast-food market will grow 17 percent to 10.5 billion euros by 2016, Euromonitor predicts. Autogrill provides expertise in the travel sector, according to e-mailed comments from Leo Leon, Burger Kings general manager for Europe, the Middle East and Africa. Autogrill, based in Novara, Italy, runs restaurants -- including more than 140 Burger Kings -- in airports, railway stations and roadsides on four continents.
The Autogrill pact allows Burger King to test the waters without big upfront investments, said Jerome Hamrit, head of the consumer and retail practice at A.T. Kearney in France.
Burger King may benefit from its beef-heavy menu, a contrast to that of McDonalds, often called McDo in France, which has increased its offerings of fare such as salads, fruit and pastries. Burger King should focus on the basics such as its 5.40 euro ($7.33) Double Whopper, said Suzanne Stahlie, managing director at consultants FutureBrand in Paris.
We can go to McDonalds to eat ice cream or have a coffee, she said. People go to Burger King for the American burger.
Burger Kings best weapon may be the nostalgia the French have for the brand, which has translated into waits that can stretch to 45 minutes or more during lunch at the Marseille airport location.
Since Burger King quit France, its become like a lover who lives far away, said Gauthier Boche, a lecturer at Celsa, the information and communication sciences department of Paris Sorbonne university. As soon as French people get to London or Ibiza, they go to Burger King.