NEW YORK Even as they promote healthier choices like salads, wraps and chicken sandwiches, America's fast-food chains are warming up to the fat, juicy burgers that put them on the map. "Burgers are back," says Ron Paul, president of Chicago-based research firm Technomic, who expects the major players to continue their monstrous investment in prime time this fall as they battle each other for market share at a time when business overall is sluggish.
Last year, fast-food marketers laid out $794.4 million in prime, a slight, 1.3 percent increase over 2005, per Nielsen Monitor-Plus. While the chains continue to push broader, more health-conscious options, light and healthy has, for the moment, taken a back seat to big and beefy. The national fast-food brands "are back in a mode where indulgence and taste reign supreme," says Paul.
Following the success of mega-sized burgers from players including Burger King (Angus Steak Burger) as well as CKE Restaurants' Carl's Jr. (Six Dollar Burger) and Hardee's (Charbroiled Angus Beef Thickburger), McDonald's this year will continue the trend with the national rollout of its own large-sized, premium-priced Angus burger, which was recently tested at Southern California and Chicago area stores.
At the same time, McDonald's—the second-biggest user of prime time in the fast food category, with expenditures of $164.9 million last year, a 13.5 percent increase over 2005—is expected to stay the course in promoting broader menu options, including the line of premium salads and veggie-packed wraps that have proved a hit. McDonald's reported year-over-year same-store sales in March rose 6.2 percent.
The biggest spender, Louisville, Ky.-based Yum! Brands, which encompasses KFC, Pizza Hut and Taco Bell, last year cut its spend by 7.4 percent to $220.6 million. Wendy's International, the No. 3 player, cut its outlay 7 percent to $125.9 million. Other big spenders upped their investment in prime time—among them, Doctor's Associates' Subway (up 26.6 percent to $101.6 million) and Sonic Corp. (up 74.4 percent to $1.4 million).
Fast food finds itself in a pressure cooker. An E. coli scare at Taco Bell last fall gave the business a black eye. And in the wake of books and movies like Fast Food Nation and Super Size Me, a backlash against the chains rages on. Even with eateries marketing healthier selections, the public seems to be getting fed up. A recent study from the Restaurant Marketing Group showed that 73 percent of consumers who had stopped patronizing McDonald's said they did so because they could no longer stomach the food. Time magazine this month reported on France's anti-fast-food movement and the array of fresh-focused quick-dining chains cropping up there.
As if that weren't enough, food marketing to children is under the microscope, as obesity rates soar. A recent study by the Kaiser Family Foundation found children aged eight to 12 viewed an average of 21 food ads each day. Still, the chains continue to lure children with promotions featuring Teenage Mutant Ninja Turtles (McDonald's) and SpongeBob SquarePants (Burger King).
Up-and-coming bakery/café establishments like Richmond Heights, Mo.-based Panera Bread and Smyrna, Ga.-based Atlanta Bread Co. have taken advantage, muscling their way into the burger joints' turf with their emphasis on the fresh over the fried. Not to be outdone, Wendy's has made a splash with its deli-fresh Frescata line of sandwiches. (Lately, however, the chain's TV appeals, featuring the tagline "Do What Tastes Right," have focused on staples like the Frosty and Crispy Chicken Sandwich.) Dunkin' Donuts, meanwhile, has teamed with TV host Rachael Ray to promote its healthier choices via a multimedia campaign.
Experts expect the chains to continue using prime also to drive traffic beyond their peak dining hours. A turf war has broken out in the busy breakfast business, with players like Wendy's, Burger King and Dunkin' Donuts turning up the heat and McDonald's upping the ante with premium coffee. Dunkin' Donuts, meanwhile, is attempting to entice customers after the breakfast rush. "You'll see a lot of breakfast [spots], a lot of late-night, trying to attract people in dayparts they haven't had before," explains Jeff Davis, president of Sandelman & Associates, Dallas.
While high-end items like Six Dollar Burgers and fancy salads are the current wave, astronomical gas prices and other economic pressures threaten to cut into working-class budgets—and could spell leaner times ahead for the fast food business. So, experts also look for the chains to continue taking to the airwaves to stress value via dollar menus and other cost-conscious promotions.