Wendy's, BK take on McD in double-cheese battle

Nation's Restaurant News,  Jan 7, 2008  by Gregg Cebrzynski

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Cheap cheeseburgers are looming as the newest weapon in the battle among the top quick-service burger chains, despite criticism--even litigation--from some franchise operators over value-menu offerings.

Wendy's has added a 99-cent double cheeseburger called the Stack Attack to its Super Value Menu, and Burger King is testing a $1 double cheeseburger in three markets.

Both sandwiches were designed to compete with McDonald's $1 double cheeseburger, a staple of the segment leader's Dollar Menu. In fact, billboards touting the new Burger King offering pointedly claim that BK's low-cost version of the double cheeseburger is bigger than Mickey D's.

Wendy's International, operator or franchisor of 6,600 restaurants, has launched an integrated campaign including in-store material, radio ads and national TV spots featuring the chain's red-wig ad icon. The campaign will run through the end of January.

Burger King has been less definitive about the marketing support for its double cheeseburger. In Southern California, at least, the chain is using highway signs that promote the burger as being more generously proportioned than McDonald's similar product.

Officials at Burger King's Miami headquarters did not respond to a request for details about marketing in other markets or how long the test would last.

The push by Wendy's and Burger King to battle it out with McDonald's on the value-price double-cheeseburger front escalates the already fierce competition to attract consumers looking for cheaper meals.

The Stack Attack is designed to give Wendy's customers "more value and more choices at a time when gas prices remain high and they are facing financial pressures," according to Paul Kershisnik, senior vice president of marketing strategy and innovation for the Dublin, Ohio-based chain.

"It's all part of a concerted effort to more effectively and aggressively leverage our total value menu, especially with younger consumers," he said.

Russ Klein, Burger King's president of global marketing, strategy and innovation, acknowledged to the chain's employees and franchisees that McDonald's double cheeseburger is a hit with value-conscious consumers.

"It is our belief that the $1 double cheeseburger is the most powerful weapon our competitor has to continue their growth and steal disproportionate share from the category," he wrote in a memo obtained by Dow Jones Newswires.

McDonald's has an edge over its rivals when it comes to selling value-priced meals because it has been doing it longer and more consistently, according to Len Kornblau, a New Jersey-based marketing consultant and educator.

Value-priced meals are part of McDonald's long-term strategy but they're more of a short-term tactic for Burger King and Wendy's, he said.

However, if Burger King and Wendy's want to compete effectively with McDonalds, they will have to keep their double cheeseburgers on the menu even if the price of gas falls and consumers feel better about the economy, Kornblau said.

Burger King has a "yo-yo" approach when it comes to offering 99-cent deals, putting them on the menu for a time then yanking them and alienating customers, he observed.

The chain seems headed in that direction with its double cheeseburger. In December a spokesman said Burger King had no plans to add the sandwich to its permanent menu even if it proved successful in test markets.

"Instead, the $1-priced double cheeseburger would be used opportunistically, as an LTO, to drive incremental traffic," he said.

That traffic would have to come from the ranks of bargain-hunting customers of Wendy's and McDonald's if Burger King wants to generate incremental sales, according to Jerry McVety, president of McVety & Associates, a foodservice consulting firm in Farmington Hills, Mich.

The $1 double cheeseburger won't drive traffic among existing customers, he said, but it can steal customers from competitors.

"Initially when someone initiates [value pricing] they're trying to pull customers from a competitor," he said. "They don't do this for existing customers."

McVety is not surprised that Wendy's and Burger King have come out with double cheeseburgers, or that Checkers Drive-In Restaurants has gotten into permanent value pricing at the 800-plus Checkers and Rally's Hamburgers outlets with a new menu offering items starting at $1.

"They're always looking for new ammunition, so to speak," he said. "As soon as one starts it, it becomes a me-too situation."

Wendy's also is seeking increased customer traffic with the rollout of Stack Attack by adding a value message supplement to its "That's Right" advertising, which since last year has focused on food freshness and quality.

Wendy's considers its double cheeseburger the first component of a strategic approach "that will broaden the way people think about value from Wendy's," according to Kershisnik.