- WHITE PAPERS
Things are getting pretty heated in the restaurant industry lately. Have you noticed?
By 'heated,' I don't mean more jalapenos on the menu. I mean chains are taking direct aim at their competitors – either through marketing campaigns or by stealing pages from product development handbooks.
The QSR race has always been intense – think of the burger wars of the 1980s. Today's competitive landscape, however, has way more players than just McDonald's, Burger King and Wendy's.
Compounding the intensity is the blurring of categorical boundaries. After all, it's been a long time since McDonald's was just about the burgers and fries.
For example, Subway showed that it's willing to take on the burger joints with its Angus Melts launch during the summer. Coincidentally, around that same time, Pizza Hut directly went after Subway's $5 Footlong campaign when it rolled out its P'Zolo sandwich line.
So, Pizza Hut spent a lot of money touting sandwiches while Subway did the same to promote its Angus offering.
Something seems amiss!
Not every brand is throwing down the gauntlet against nontraditional competitors. Others have simply gone after players in their own league with intensified energy.
In less than a year, McDonald's introduced Chicken McBites; KFC introduced Original Recipe Bites; and Whataburger rolled out Whatachick'n Bites. Not to be outdone in the chicken snack category, Popeyes' has come out with Rip'n Chick'n and Dip'n Chick'n. Who knew chicken bites would become so territorial?
Meanwhile, Arby's just launched a new marketing campaign that specifically calls out Subway for using pre-sliced, shipped meat.
About a week prior, Domino's did the same to Pizza Hut – although not by name – when it touted its new pan pizza that uses fresh dough. This, Domino's says, is unlike "a lot" of other pan pizzas that start out with frozen dough. Of course, pan pizza is Pizza Hut's signature dish. Ouch!
Within the past year, the fight for market share over K-Cup coffee has heated up between Dunkin' Donuts and Starbucks. To crowd things up a bit, rumors are also now floating that McDonald's may be eyeing the coffee retail space.
And speaking of coffee – it's no longer just about Starbucks, Dunkin' Donuts and McDonald's anymore. Krispy Kreme, Wendy's, Bojangles, even Pizza Ranch have growing coffee programs in place.
Tim Hortons has historically been a strong coffee brand and is now vying for a bigger piece of the U.S. market. Interim CEO Paul House also recently said that the chain is pushing for a bigger share of Canada's lunch crowd and would like to surpass McDonald's for the daypart's No. 1 spot in that country within five years.
You read that correctly – pass McDonald's during lunch! Fighting words, indeed.
But does this aggressive strategy work?
It depends on who you ask, of course. Regarding the Domino's diss, Pizza Hut's chief marketing officer Kurt Kane had plenty of defense when he told Advertising Age they're "used to competition following our lead, but consumers have proven time and time again that they will not settle for second best."
Aiming at a specific target does seem to be working well for Taco Bell. In July, the chain launched an ambitious new Cantina Bell menu with "higher quality" ingredients typically found in the fast casual segment. The chain's sales jumped while Chipotle's slumped.
When Burger King announced its comprehensive new menu in April, executives admitted it was very similar to those found in any given McDonald's restaurant. Like its longtime nemesis, Burger King now features smoothies, frappes, frozen lemonade, wraps, oatmeal, etc.
And since that launch, the King's sales have been steadily rising. In its first earnings call since going public in June, the company reported a nearly 60 percent profit behind 6.4 percent systemwide sales growth and 4.4 percent comp sales growth.
It's official: The gloves are off. Game on.