18 Nov

Why Burger King has long-term initiatives


Long-term initiatives update

In the last two parts in this series, we covered Burger King’s specific initiatives for the third quarter. In this part of the series, we’ll look at some long-term initiatives that the company has taken to boost sales at Burger King (BKW). BKW is changing the image of existing restaurants. It also started the Restaurant Excellence Visit program.

Why Burger King has long-term initiatives

Changing its image

In the second quarter, the company changed the image of ~30% of its restaurants. Management stated that the company is on track to change the image of 40% of its stores in the US by the end of 2015. In the third quarter earnings call, management said that it’s on track to achieve this target. It may achieve it earlier than the target date.

Restaurant Excellence Visit (or REV) program

At the beginning of the year, Burger King launched the REV program. Under this program, the company worked with a restaurant manager and the team by sharing best practices.

To ensure the success of the REV program, auditing is conducted by outside specialists. The results allow Burger King to set a benchmark for the company’s operations.

The company stated that the REV program improved guest satisfaction by 6%. It improved the speed of service by 8% during the quarter.

Other restaurant companies, like Chipotle Mexican Grill (CMG), took initiatives to improve the speed during peak hours. To learn more, read “Why Chipotle Mexican Grill’s same-store sales grew.”

Brinker International (EAT) introduced its program “Kitchen of the Future.” To learn more, read “Must-know: Why Chili’s is changing the way we order food.”

The Consumer Discretionary Select Sector SPDR (XLY) holds CMG as well as several other restaurant stocks, including McDonald’s (MCD).

So far, we covered initiatives to improve BKW’s same-store sales. In the next part of this series, we’ll look at the second key revenue driver—unit growth.

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