Burger King (NYSE: BKW ) is hoping to turn spud heads this holiday weekend.
The fast-food giant is introducing its French Fry Burger on Sunday. As you can probably imagine, it's just a regular hamburger patty topped with fries.
In and of itself, this isn't outrageous. It has offered sandwiches topped with onion rings before. You've probably seen some enterprising BK diners make their own over the years, so why shouldn't the chain combine two of its most popular menu items into a single offering?
It's going to be popular -- especially at the $1 price point -- but it won't equal the success that Yum! Brands (NYSE: YUM ) had at Taco Bell last year with Doritos Locos Tacos.
It will be a long time before we see something have a positive impact on sales the way that Taco Bell had with its Doritos-flavored taco shells last year. Taco Bell's comps rose a hearty 12% during the first full quarter on the market, and the chain has gone on to sell more than 600 million of them.
Burger King could use the boost. Comps declined 0.5% in the U.S. and Canada in its latest quarter, and that was after a 3% slide during the first three months of the year. McDonald's (NYSE: MCD ) has responded to its own sluggish comps since last last year by beefing up its Dollar Menu items, and that is probably why BK is aggressively pricing these burgers at a buck.
There are a lot of cheap burgers out there these days, and that's why the French Fry Burger isn't going to have the same kind of sizzle that Taco Bell experienced with its flavored shells.
This may be just as well for BK. This sandwich appears to be a margin killer for franchisees. The reason fast-food franchisees have embraced dollar menus is because folks will still load up on fries and drinks. Even if they go for the value-priced options, we're still looking at $3 for a meal. BK and Mickey D's have been pushing into premium coffees, smoothies, and other beverages to push those checks higher.
Well, how often do you think someone is going to add a side of fries -- a higher-margin item -- to a French Fry Burger order? Of course, it's going to happen. You don't order the French Fry Burger unless you like fried potatoes. The four or so fries sprinkled under a bun may not satisfy that fry craving. However, folks ordering off the value menu to save money will think twice about it, and that's where this sandwich is unlikely to stick around once it's time to swap out the fall menu.
It will make headlines now, but it won't make money later.
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