News
Carl's Jr., Hardee's period six comps fall
July 21, 2009
CKE Restaurants Inc.'s company-operated same-store sales fell at both Carl's Jr. and Hardee's for period six ended July 13, as sales couldn't keep pace with last year's strong period six, the company has announced.
Blended company-owned comps fell 5.0 compared to an increase of 5.2 percent in the same period last year. Year-to-date, blended company-owned comps fell 3 percent compared to an increase of 2.5 percent last year.
"Period six was a particularly difficult period from a same-store sales perspective as both brands were rolling over strong prior year sales due, in part, to last year's government stimulus checks," said Andrew F. Puzder, CKE chief executive officer, in a news release. "However, we are encouraged by the results of some of our recent sales-building initiatives."
Comps at company-owned Carl's Jr. stores were down 6.1 percent compared to an increase of 4.9 percent in the same period last year. Year-to-date, comps at company-owned Carl's Jr. stores were down 5.6 percent compared to an increase of 3.8 percent in the same period last year.
Carl's Jr.'s period six product focus, including the reintroduction of the Teriyaki Burger, was supported with advertising starring Audrina Patridge from ‘The Hills' TV show. The Teriyaki Burger has since been among the chain's best-selling premium burgers, he said. The chain also began running a limited-time 2 for $4 Western Bacon Cheeseburger promotion supported by a commercial starring Top Chef's Padma Lakshmi.Since the promotion begain, sales of the product have increased substantially, Puzder said.
Carl's Jr. continues to push its premium burgers as a value compared to casual dining. In a previous article on the company's premium burger strategy, Brad Haley, executive vice president of marketing for CKE, said sales of Carl's Jr.'s premium burgers are still strong, but sales of add-ons and combo meals have been suffering.
Carl's Jr. also is testing Hardee's Made-From-Scratch Biscuits at a Carl's Jr. location in Buena Park, Calif., and is encouraged by results. The company plans to expand the test to more restaurants, which involves working out equipment and operations issues.
Hardee's period six
Comps at company-owned Hardee's stores were down 3.6 percent compared to an increase of 5.7 percent in the same period last year. It also is the second period in which Hardee's comps have declined. Year-to-date, comps at company-owned Hardee's stores were up 0.5 percent compared to an increase of 1 percent last year.
Hardee's period six product focus has been the introduction of a lower-priced breakfast sweet-good item known as ‘Biscuit Holes,' which was supported by ads that featured actual consumers coming up with alternative, often inappropriate, names for the product.
"In addition to generating a significant amount of press attention from this ad campaign, the Biscuit Holes are also proving to be a popular alternative for those customers who would normally be looking for a donut or pastry for breakfast," Puzder said.
The Biscuit Hole ads have drawn criticism from bloggers and the media and angered the Parents Television Council, according the the Triangle Business Journal. Rocky Mount, N.C.-based Boddie-Noell Enterprises, Hardee's largest franchisee, also is refusing to run the ads in its markets.
From Triangle Business Journal:
"Thank you for your recent letter complaining about the biscuit hole advertising. I agree with you 100 percent. Why in heavens name does Hardee's Food Systems and Mendelsohn Zien Advertising want to put Hardee's in a category that diminishes not only the product but the brand itself?" — Ben Mayo Boddie, chairman of the board ofBoddie-Noell Enterprises, in the letter responding theParents Television Council'scomplaints.
Revenue decline
Total revenue for company-operated restaurants declined $3.0 million, or 3.3 percent, to $86.4 million in period six, driven by the refranchising of Hardee's restaurants during the prior fiscal year as well as the same-store sales decline.
The company will report period seven same-store sales results on or about Aug. 19.
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