News
Carl's Jr., Hardee's bite back in burger wars
August 17, 2009
With Burger King and McDonald's debuting their own premium burgers, regional chains Carl's Jr. and Hardee's are not taking the entries lightly. Andrew F. Puzder, CEO of CKE Restaurants Inc., parent company of Carl's Jr. and Hardee's, has issued a full frontal assault aimed directly at McDonald's and their new Angus Third Pounders.
Puzder is so sure of the superior quality and value of his two chain's premium burgers that CKE Restaurants will be offering a money-back guarantee that will give customers a refund if they don't agree that Hardee's Thickburgers or Carl's Jr.'s Six Dollar Burgers are better tasting than the McDonald's Angus burgers. The offer will begin in mid-September and will be supported with advertising.
Carl's Jr., located primarily in Western states, also is taking on McDonald's iconic Big Mac, and is debuting tomorrow its own version, the Big Carl. The Big Carl has twice the meat as a Big Mac, twice the cheese and sells for $2.49 or less in most Carl's Jr. stores. The Big Mac ranges in price, but averages more than $3, according to a CKE news release. *See video below.
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Carl's Jr. Big Carl |
"While McDonald's is trying to convince people that they can make as good a premium-quality burger as Carl's Jr. or Hardee's can, we knew we could make a better double burger for less money," Puzder said. "The Carl's Jr. Big Carl costs a lot less than the Big Mac, is charbroiled, and has twice as much meat and cheese. Burger fans should love that."
CKE premium burger longevity
Puzder wants to make it clear that California-based Carl's Jr. first introduced the premium burger to the quick-service market in 2001 with the Six Dollar Burgers. Hardee's followed in 2003 with the Thickburger. He also asserts that McDonald's Angus burger — the chain's first new burger launch in the amount of time Carl's Jr. and Hardee's have introduced more than 40 limited-time burgers — is an imitation of the two chain's premium offerings.
"We're glad being copied is considered the highest form of flattery, since we have been seeing a lot of it lately," he said. "We've successfully faced similar attempts to copy Carl's Jr. Six Dollar Burgers and Hardee's Thickburgers, and we've seen how McDonald's versions fared against ours in their various test markets. No one has been able to match our taste, quality or price."
Puzder also points out the quality differences of his chain's burgers and that CKE's premium burgers are larger yet lower priced.
Both the Six Dollar Burger and Thickburger product lines are made with 100 percent Black Angus Beef. The Six Dollar Burger patty weighs about a half pound, and the Original Thickburger is one-third pound. Both are charbroiled. The Original Six Dollar Burger costs $3.99 — the same as McDonald's Third Pounders — and the Original Thickburger costs $3.39.
"The Original Six Dollar Burger at Carl's Jr. has 24 percent more meat than McDonald's Third Pounders, yet costs the same," Puzder said, noting that the Hardee's burger weighs the same as McDonald's yet costs less. "That's the value of our burgers."
Carl's Jr. offers nine varieties of the charbroiled 100 percent Black Angus beef Six Dollar Burgers that include premium toppings such as Portobello mushrooms, with a patty weighing about a half pound. Hardee's also offers a full line of nine charbroiled 100 percent Black Angus beef Thickburgers, available in one-third to two-third pound sizes.
McDonald's responds
Danya Proud, spokeswoman for McDonald's USA, said the company is pleased with results of the chain's new burger line. The Angus Third Pounders include three varieties: the Deluxe, the Bacon & Cheddar and the Mushroom & Swiss, all of which are topped with fresh ingredients.
"We extensively tested these products and do believe based on customer response and customer feedback that we are providing not only a great tasting product at a value that is great for the customers, but we have 14,000 locations, so we are able to bring this great tasting product to the entire U.S., which is important for us," she said.
CKE Restaurants, in comparison, had a total of 3,133 franchised or company-operated restaurants in 42 states and in 14 countries, including 1,205 Carl's Jr. restaurants and 1,915 Hardee's restaurants at the end of its first quarter on May 18.
Proud also said that Angus products have grown in popularity over the past several years, and McDonald's new burgers offer the quality meat at the convenience and value McDonald's continually strives to offer. The McDonald's Angus are a blend of Red and Black Angus, which are equal in taste and quality.
Regarding Carl's Jr. new Big Carl take on McDonald's flagship sandwich the Big Mac, Proud said that McDonald's is "extremly flattered that so many people are paying so much attention to our products and our business." But the company's focus remains, as it always has been, "on our business and our customers.
"And if you look at our business results, they speak to the fact that we are meeting our customers' needs now more than ever," she said.
McDonald's recently reported that in July, U.S. comps were up 2.6 percent, compared to a 6.7 percent increase in the same month last year. The company credited the success of its McCafe espresso-based coffees and the continued strength of its core menu for the positive comps.
CKE Restaurants period 7 results
Carl's Jr. and Hardee's, however, have struggled in recent months, with Carl's Jr.'s comps decline going back to the beginning of the year. Carl's Jr. has a significant portion of its company-owned stores in California, one of the states hit hardest by unemployment. The company has maintained that its premium burgers continue to do well, while sales of combos and add-ons are down.
CKE Restaurants today released results for period seven ended Aug. 10, showing slight improvement in same-store sales at company-owned restaurants. Blended company-owned comps for Carl's Jr. and Hardees were down 3.6 percent, compared to an increase of 3 percent in the same period last year. In comparison, period six blended company-owned were down 5 percent.
At Carl's Jr., which is advertising its Teriyaki Six Dollar Burger with a campaign by The Hills star Audrina Patridge, company-owned comps are down 5.2 percent for period seven, compared to an increase of 4.2 percent in the same period last year. For the second quarter, comps were down 6.1 percent, and for the year down 5.6 percent.
At Hardee's, which is promoting its French Dip Thickburger with a French maids campaign and its new breakfast Biscuit Holes with a controversial ad campaign, company-owned comps were down 1.6 percent. For the second quarter, comps are down 2.7 percent, and for the year, up 0.2 percent.
Both brands also launched Monster energy drinks during the period.
Puzder said the Teriyaki Burgers, which are priced at about $2.89, "have been among the best selling premium burgers on our menu."
The ad campaign supporting The Big Carl will begin airing tomorrow. The commercials, created by Mendelsohn Zien Advertising, can be viewed atwww.YouTube.com/CarlsJr. Carl's Jr. and Hardee's will also share information about the campaign on their Twitter (www.twitter.com/carlsjrandwww.twitter.com/hardees) and Facebook pages (www.facebook.com/carlsjrandwww.facebook.com/hardees)
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