Recession concerns won’t impact sales of Popeyes’ new fried chicken sandwich: Restaurant Brands CEO – Yahoo Finance
If there is a U.S. recession on the near-term horizon, it’s not yet appearing in any form in the drive-thrus at fast-food giant Restaurant Brands International (QSR).
The owner of Burger King, Popeyes Louisiana Kitchen and Tim Horton’s continues to score notable successes with new, higher priced menu items. That includes the new $4.99 (pre-tax) Popeyes fried chicken sandwich, which has blown up on Twitter as hardcore eaters voice their views on who has the best fried chicken sandwich in the fast-food game (Chick-Fil-A or Wendy’s). Restaurant Brands CEO José Cil told Yahoo Finance — in not so many words — the strong consumer response on social media has translated into impressive sales of the sandwich since its August 12 release.
Burger King’s new plant-based Impossible Foods Whopper — priced around $6 — has been so hot the chain is having a hard time keeping it in stock, Cil suggested.
“If we deliver great food, great experiences and great looking restaurants I think what happens at a macro [economic] level is less impactful at our restaurants. I have seen great businesses do poorly in up economies and smaller businesses do really well in bad economies,” Cil says.
All in all, if consumers were fearful of losing their gigs — these higher priced menu items at Restaurant Brands probably wouldn’t be selling that well. Instead, folks would be opting to eat at home to save money — similar to behavior seen during the 2008-2009 financial crisis. Cil says he hasn’t seen any cooling in sales at the company’s thousands of U.S. stores.
Restaurant Brands’ financials back up Cil’s claims. Popeyes and Burger King saw 2.9% and 0.5%, respective increases, in U.S. same-store sales during the second quarter. Considering how competitive the fast-food industry is — and Restaurant Brands not being a major player in the key breakfast hours like rival McDonald’s —the sales were better than average.
Investors appreciate Cil’s push into more premium products, even though Cil acknowledged on the company’s second-quarter earnings call this month Burger King could use a few more entry level foods (such as the new $1 taco). Restaurant Brands stock is up a cool 46% this year, about three times more than the S&P 500 (^GSPC). McDonald’s and Wendy’s shares have gained 21% and 35%, respectively, year-to-date.
“We are confident in long-term growth with international network of master franchisees. Menu innovation at Burger King U.S. and innovation/digital enhancements at Tim Horton’s Canada should support same-store sales acceleration,” wrote Credit Suisse analyst Lauren Silberman in a recent note to clients.
See you at the drive-thru.
Yahoo Finance’s Myles Udland contributed to this story.