Meat Industry INSIGHTS Newsletter

970871 Burger King Taking on Big Mac

August 28, 1997

CHICAGO - Burger King, the No. 2 fast-food hamburger chain, is taking aim at McDonald's Corp. with a new burger that will compete directly with McDonald's 29-year-old Big Mac.

Burger King said Thursday its new "Big King" sandwich -- which has more beef and less bread than the Big Mac -- will make its debut over the Labor Day weekend. Burger King, which is owned by Britain's Grand Metropolitan Plc, said it will sell the "Big King" for 99 cents through Sept. 14.

McDonald's, meanwhile, has a burger on the grill that could in the future pose some competition to Burger King's flagship "Whopper" hamburger.

"In fact, it's even been dubbed as a potential 'Whopper Stopper'," restaurant consultant Dennis Lombardi of Technomic said of McDonald's "Big 'n Tasty," which is being tested in California.

McDonald's spokesman Chuck Ebeling said the "Big 'n Tasty" -- a quarter-pound hamburger with lettuce, tomato and a mayonnaise-based sauce -- is a "local creation" for the California market.

"It's not a national test. We are keeping a close eye on it because there was a day when the Big Mac was a local test," Ebeling said. "But we're not about to make some national announcement."

Burger King's new "Big King" that is being launched nationally -- the first permanent addition to its lunch and dinner menu since 1990 -- comes at a time when competition in the fast-food arena has intensified.

"I think they're stepping up their campaign," Lombardi said.

The "Big King" also is being launched when McDonald's is seen to be without a broad U.S. marketing strategy. This spring, McDonald's pulled the bulk of what was supposed to have been a long-term price promotion -- Campaign 55 -- after about six weeks.

It ended Campaign 55, which featured certain hamburgers for 55 cents when customers also bought french fries and a drink, after it failed to boost sales.

McDonald's has said it is reviewing the pricing of its "Arch Deluxe" hamburger, which was launched in May 1996 and is normally sold for more than $2.00. Analysts and franchisee sources said they expect McDonald's will eventually discontinue the "Arch Deluxe," which they said has not helped the fast-food chain draw in more customers.

Now, for Burger King, the test will be whether it can increase sales with the "Big King."

"Either they draw new customers or draw their existing customers more frequently," Lombardi said.

Burger King said the "Big King" has 75% more beef and less bread than the Big Mac. It includes two hamburger patties, two slices of cheese, lettuce, onions, pickles and a sauce.

"With more meat than the other guy's sandwich, the Big King clearly outsizes the competition, and that's why we think it's a bigger, better Big Mac," Jim Watkins, senior vice president of North America marketing for Miami-based Burger King, said in a statement.

"If you want a Big Mac, there's still only one place to get it," Ebeling of McDonald's countered. "Big Mac is the world's favorite sandwich."

Piper Jaffray analyst Allan Hickok, however, said he believes Burger King is in a good competitive position with its new "Big King" burger.

"They're going right at (McDonald's) with a 'Big Mac' (type burger) that is going to taste better, cost less and have more meat," Hickok said.

He said he believes "Big King" will have a taste advantage because Burger King grills its meat while McDonald's does not.

Burger King said the "Big King" product roll-out is supported by advertising based on "food and music" television spots as well as advertisements featuring college football coaches.

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