020307 Burger King Seeks To Restore Lost Market ShareMarch 2, 2002Miami, FL - Burger King Corp., weeks away from being sold by parent Diageo Plc, is seeking to bring new restaurant operators, revamp its menu and bolster advertising, in an effort to restore its share of U.S. hamburger sales. “We are recruiting energetic, talented and business-tested individuals and organizations that share our belief in the opportunities of the Burger King brand,” Chief Executive John Dasburg said. Burger King lags a distant second behind rival McDonald's Corp., with only about one-fourth of McDonald's annual systemwide sales of more than $40 billion. London-based conglomerate Diageo Plc is putting the fast-food chain on the auction block early next month as it accelerates long-awaited plans to focus on its core drinks business. Between 1998 and 2000, Burger King's share of U.S. hamburger sales fell to 18.8% from 20.2%, while McDonald's rose to 43.1% from 42.8%, according to market research firm Technomic Inc. In addition to declining sales, the Miami-based company has suffered from management turnover, marketing missteps and financial difficulties among its franchisees. In a switch from a development strategy that has focused on growth through existing operators, Burger King is looking for more outsiders to build its system, Dasburg said in a statement. Ninety-two percent of Burger King's more than 11,400 restaurants are run by independent franchisees. BOOSTING SHARE WITH MENU ENHANCEMENTS In his first formal news briefing as CEO of the company, Dasburg said that he hoped to boost Burger King's U.S. hamburger share 4 points to 23% by 2004, by increasing average annual sales per store to $1.25 million from roughly $1 million currently. The company is kicking off a new advertising campaign on March 4, coinciding with a revamped menu that includes a new and improved Whopper, its flagship hamburger, followed by a veggie burger and chicken Whopper later this spring. Other planned menu additions include three kinds of salads and new hamburger that features a hearth- baked bun and a higher grade cheese. The $300 million campaign features television advertising with L.A. Lakers basketball star Shaquille O'Neal, and a new slogan, “At Burger King you got it,” replacing the well-known, “Have it your way.” “We have seen a precipitous decline in traffic over the past five years,” Dasburg told reporters. “Lost market share eroded the top line. But our focus is to turn around the top line by bringing more customers into our restaurants.” Sources said that the company will formally go to the auction block early in March. Diageo, whose brands include Smirnoff Vodka and Johnnie Walker Scotch, is looking at several options for separation, including an outright sale, spin-off or management buyout. Diageo wants to focus on its core beverage business.
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