Restaurant Brands Pits Burger King Against Popeyes in Chicken Sandwich

CShort Drama 2021-03-11

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The burger joint could undermine the sales growth its sister chain has enjoyed. At this point in the chicken sandwich wars, a fast-food chain needs to have its own version just to remain relevant even if it doesn't really move the needle on sales. Any announcement that a new version will be hitting the market is pretty much greeted with a yawn. Yet Burger King's decision to introduce its own chicken sandwich is different because its parent holding company Restaurant Brands International (NYSE:QSR) also owns Popeyes Louisiana Kitchen, which effectively reignited the war two years ago when it introduced its spicy chicken version. There's a real risk that by pitting two of its own brands -- Burger King against Popeyes -- Restaurant Brands will undermine what has been the mainstay of its growth. Burger King's chicken sandwich. Image source: Burger King. Ruffling some feathersWhile Popeyes made chicken sandwiches a conversation starter again, Chick-fil-A remains the undisputed consumer choice. A recent survey by Edison Trends found Chick-fil-A continued to hold a 45% share of the online spending market for chicken sandwiches, or more than double that of Popeyes, which only just edged out McDonald's (NYSE:MCD), 17% to 16%. That's notable because that's not even including any of the three new chicken sandwiches McDonald's just introduced this year. The survey also showed Chick-fil-A's share rising once again after having ceded some ground to Popeyes following its introduction. Popeyes briefly became the market leader a year ago, but failed to sustain its edge and has seen its share slowly dwindle from its peak just north of 30%. Now Burger King says it plans to introduce its own chicken sandwich, and that could cut the legs out from under its sibling even more. Promising not to "half a** a new chicken sandwich," Burger King will unveil its upgraded version later this year, a glacial pace for an industry that's being inundated with similar types of sandwiches. Beyond Popeyes, McDonald's, and Chick-fil-A, Yum! Brands' KFC and Taco Bell chains have their own, as do Wendy's and Shake Shack. The Burger King chicken sandwich will feature hand-breaded white meat on a potato bun with pickles and its own signature sauce. Whether it measures up to Popeyes' chicken remains to be seen, but there's a possibility it could draw customers away from Popeyes if it's any good. And Restaurant Brands has had to lean heavily on Popeyes for sales growth. Popeyes rules the roostBoth Burger King and its sister brand, coffee shop Tim Hortons, have struggled in recent periods, a condition the pandemic exacerbated. Where Popeyes saw systemwide sales jump almost 18% in 2020 to over $5.1 billion, the burger joint suffered an 11% decline, and Tim Hortons was a complete reversal of the chicken chain with a 17.5% drop in sales.

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