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growth 2015-04-20

Is Burger King facing price war from McDonalds, KFC?

Global chains have stuck into a price war, where each of them is competing with one another to deliver their best at an everyday value pricing.

By Deputy Features Editor
Is Burger King facing price war from McDonalds, KFC?

With Western foods becoming more popular among Indians, brands like KFC, McDonald’s, Burger King and Dunkin’ Donuts, operating in the same segment are facing a price war amongst one another.

McDonald’s which is known for serving low-priced burgers and combo options has recently revised its burger prices selling its cheapest burger at Rs 27 which was earlier for Rs 25. On the other hand, players like KFC and Dunkin’ Donuts which are operated in India by Yum Brands and Jubilant FoodWorks respectively are selling their burgers a bit higher compared to the price being offered by McDonald’s. Dunkin Donuts is offering its cheapest ‘Potato Harsh Brown Burger’ at Rs 49 and KFC is offering ‘Potato Crisper’ at just Rs 29 which is all inclusive of taxes. The new entrant in the segment, Burger King is offering ‘Crispy Veg’ at Rs 35 which is its starting price for the Indian market. However, the chain has priced its product on every day value pricing. Burger King which entered with about 50 per cent of vegetarian menu is also getting good sales on its both vegetarian and non-vegetarian products.

“We have a sale per cent age of 50:50 shared between both non-vegetarian and vegetarian offerings. Both our products are doing an equal sale till now,” shares Rajeev Varman, CEO, Burger King India.

McDonald’s which used to sell its starting combos under ‘Econo- meal’ at Rs 79 has revised its price at Rs 109. Whereas its competitor Burger King is offering its combo ‘Stunner Menu’ at Just Rs 69 which includes crispy veg burger, fries and small soft drink. While KFC has its combos starting at RS 79 and Dunkin Donuts is not offering any combo on its menu so far. Thus, we can say that to retain the market for their brand, global chains have stuck into a price war, where each of them is competing with one another to deliver their best at an everyday value pricing.

“Our strategy is about everyday value pricing, so if you look at our stunner menu, a complete veg combo is at Rs 69 and we have non veg combo at Rs 79 and the sandwich alone is 35 Rs and non-veg sandwich is 49 Rs. We have cravers starting at Rs 25 and we have good pricing of all our premium products,” points Varman.

However, chains like Johny Rockets and Fatburger are struggling to compete with these brands as they have kept their burgers a bit highly priced as compared to these brands. Meanwhile, upcoming chains like Carl’s Jr and Wendy’s are yet to decide on their pricing keeping in mind the tough and demanding Indian consumer.

Talking to Restaurant India earlier, Ned Lyerly, President- International, CKE Restaurants said, “Our primary target demographic will be the 18-34 age bracket with aspirational ideals that have the disposable to frequent QSR venues on a regular bases and are seeking a premium lunch or dinner experience. Pricing will be with reach of consumers that currently frequent existing QSR and casual dining venues.” The burger chain is to enter India by June as per the latest information by its master franchisee in the country CybizCorp.

Hence, the competition in the fast growing Indian market is getting a bit tough for not only the two of the most celebrated Burger Chains like McDonald’s and Burger King, but also their ongoing competitor like American Doughnuts chain Dunkin’ Donuts and KFC which is so far serving best quality chicken products and donuts in the country respectively. Thus, we can say that Indian food industry is not only facing a price war but it also going through a burger war.

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