Restaurant Brands International posted strong first-quarter results, buoyed by strong sales growth at Burger King. The quick-service restaurant (QSR) chain reported system-wide sales growth of 11 percent, with net restaurant growth of 7 percent and comparable sales of 3.8 percent, Chief Executive Officer Daniel Schwartz said on the company’s Tuesday (April 24) earnings call.
“In the U.S., our sales growth was a result of impactful marketing, product innovation, and our consistent strategy of maintaining a menu that is balanced across price points,” Schwartz said in the call. “Innovation included the launch of our double quarter pound king and the launch of our spicy crispy chicken sandwich, an evolution of our improved quality crispy chicken platform that we launched last year.”
The company also saw similarly strong growth at another one of its brands, Popeyes, which saw system-wide sales growth of 11 percent, with net restaurant growth of nearly 7 percent and comparable sales growth of 3.2 percent.
But another one of its brands, Tim Hortons, didn’t fare as well. That brand experienced system-wide sales growth of only 2 percent, with net restaurant growth of 2.8 percent and flat comparable sales.
“Our Tim's comparable sales this quarter reflects flat results in Canada and softness in the U.S.,” Schwartz noted in the call.
Yet the company had strong comparable sales in overseas markets such as Brazil, Russia, Spain and the U.K. Still, the company experienced “continued softness” in Australia and Korea due to “broader industry softness,” according to Schwartz.
Innovation Through Technology
Overall, Schwartz said that technology has become a priority of the company. In line with that goal, Schwartz said that Restaurant Brands International appointed its previous chief financial officer (CFO), Josh Kobza, to oversee the company’s technology efforts. And, broadly speaking, the company is working to “accelerate our use of technology to enhance our guest experience.”
Restaurant Brands is also focusing on its omnichannel efforts, with delivery as one prong of its approach. Schwartz said that delivery has driven sales in international markets, particularly in China, Spain and Turkey. But the company is still in the early stages of experimenting with delivery in the U.S. to allow customers to access its brands through more channels.
“Our initial results are encouraging,” Schwartz said. “We have rolled…delivery out to several hundred restaurants with the Burger King brand and several hundred with the Popeyes brand, and I think we’re still in the phase where we're seeing good results, so we want to continue monitoring it and adjust accordingly.”
In particular, Schwartz noted that the company has seen customers order Popeyes products for dinner or late-night eats, which are parts of the day that “typically involve larger check sizes.” He also noted that results from Burger King have been “encouraging so far” and the company plans to “broaden our test in the coming months.”
Burger King is hardly the only QSR to offer delivery to customers hungry for dinner or a late-night snack. Last year, McDonald’s, Taco Bell and Wendy’s all funneled resources into fast-food delivery trials and continue to invest in the strategy of bringing the drive-through to mobile devices. McDonald’s delivery is now widely available across the U.S. via a partnership with UberEats.
Meanwhile, Taco Bell offers DoorDash delivery from more than 1,000 restaurants in 50 markets. It also teamed up with Lyft to beta-test a “Taco Mode” concept in California, which allows late-night riders to reroute to the nearest Taco Bell for a snack on the way home. Apparently, the trial was successful enough to warrant national expansion in 2018.
Wendy’s was the most recent to jump on the bandwagon, joining forces with DoorDash in December to deliver to 50 markets across the U.S.