No matter how successful or unsuccessful a hamburger chain is, staying relevant and profitable in today’s market requires constant work and innovation. That’s why you’ll see several major burger chains, ranging from struggling brands like Steak ‘n Shake to popular brands like McDonald’s and Burger King, reinvent themselves this year.
Some of these reinvention efforts are as simple as testing new menu items and upgrading restaurants. Other changes currently underway at these major burger chains are far more sweeping, including corporate restructurings and complete overhauls of the way they have traditionally done business.
While none of these burger chains reinvent themselves in exactly the same way, the goal is the same: to keep customers happy. They want to deliver better food, better service, and better overall experiences in order to convince customers to keep spending money at their restaurants in a market with nearly countless options and fierce competition.
Here are five big burger chains that are reinventing themselves in 2023 to become even better or regain popularity after falling out of favor with customers.
Red Robin was hit with a double whammy of declining customer satisfaction and revenue around 2016 and 2017, issues that CEO GJ Hart attributed to factors including lower food quality and staff cuts, according to Nation’s Restaurant News.
That’s why the burger chain is aiming for a strong comeback under its new “North Star” five-point plan which was unveiled in January 2023. The plan aims to help Red Robin improve the customer experience with menu refreshes, better food quality and new flat grills that have replaced the conveyor belts once used for cooking burgers.
Other principles of this far-reaching plan include reducing incremental costs, increasing customer engagement, rewarding restaurateurs for performing well, and improving revenue.
The burger chain is already seeing promising months in this reinvention plan. Red Robin reported an 8.6% increase in same-store sales, improved customer satisfaction, and a small but still notable 0.6% increase in same-store traffic in the first quarter of 2023. Hart also said on an earnings call this week that Red Robin broke more than 700 sales records in the quarter, including hourly, daily and weekly records for restaurants.
“We are committed to diligently executing our strategic plan, and I am more confident than ever in the return of this iconic brand,” Hart said in a statement.
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For a long time, Steak ‘n Shake had something of an identity crisis. The regional burger chain, mostly focused in the Midwest, served customers through drive-thrus, but it also offered full table service to customers at its restaurants.
Unfortunately, Steak ‘n Shake couldn’t really satisfy customers in both formats. Customers have complained of long wait times, poor service, and declining food quality. This decline in popularity among customers coincided with years of significant Steak ‘n Shake restaurant closures and a dangerous run-in with bankruptcy in 2021.
Fortunately, things started to change for Steak ‘n Shake with a $50 million reinvention of its business model that began to shift restaurants from a full table service to a counter service model where customers place orders through kiosks. Sardar Biglari, CEO of Steak ‘n Shake’s parent company, Biglari Holdings, wrote in a February 2023 letter to shareholders that this transformation has already boosted productivity at restaurants and more than doubled annual sales per employee.
In the long term, Steak ‘n Shake wants to become “the most productive and hospitable restaurant business in the industry,” Biglari wrote.
After facing years of lagging sales compared to its competitors, Burger King was ready to invest heavily – $400 million to be exact – to reinvent itself. The burger chain launched a strategy called “Reclaim the Flame” last year, under which Burger King planned to modernize its image, increase advertising and refresh restaurants with better technology and equipment. .
The strategy also provided some improvements and innovations for the current menu. These included investing in “premium branding” for the Whopper and developing new flavor extensions for the signature burger, as well as creating a line of chicken sandwiches “worthy of a destination “.
While Burger King’s work is certainly not done yet, these sweeping changes already seem to be paying off. The burger chain reported an increase in customer satisfaction and an 8.4% increase in same-store sales in the fourth quarter of 2022, as well as an even higher 12.3% increase in same-store sales in the first quarter of this year.
Unfortunately, Burger King’s massive push to improve its image and restaurants also means major closures are on the horizon. Josh Kobza, CEO of Burger King’s parent company, Restaurant Brands International (RBI), revealed earlier this month that they plan to close around 300-400 locations this year, most of which will be underperforming units. .
Judging by McDonald’s stellar first quarter of 2023, which led to a double-digit increase in global same-store sales, the fast-food giant is certainly not suffering from any popularity issues right now. That being said, there is are several aspects of its business that have become slightly stale, prompting the burger chain to act to remove any potential barriers to continued success.
To start, McDonald’s launched a radical “Accelerating the Arks” growth strategy in 2020. This strategy includes several key principles, such as accelerating the opening of new restaurants, connecting with customers through marketing campaigns culturally relevant, enhancing menu classics, providing more personalized digital ordering experiences, and streamlining business operations to support innovation.
McDonald’s has already made major strides on many of these principles in 2023. It’s elevating its core menu by rolling out major improvements for its signature burgers, building on the success of its Crispy Chicken Sandwich launch in 2021 by renaming it McCrispy. . , and launching his latest celebrity collab with married rappers Cardi B and Offset in February.
To make company operations more streamlined and efficient, McDonald’s also underwent a major restructuring and reportedly laid off hundreds of staff in April after deciding the system had become so divided it was hampering innovation.
The final aspect of McDonald’s current reinvention journey involves its franchisees. In early 2023, the burger chain rolled out a new PACE assessment program that added tougher standards of excellence for franchisees and increased restaurant inspections to ensure operators meet those criteria. Although McDonald’s claims that this program has already led to increased customer satisfaction in other markets outside the United States, it has been a major source of tension between the company and the operators of its American restaurants, Catering Business Magazine reported.
Although Jack in the Box restaurants have traditionally included dining rooms, this regional burger chain has a very different vision for its future.
In October last year, Jack in the Box showed off its first-ever prototype restaurant which did away with in-store dining altogether to focus on drive-thru and digital ordering. The new restaurant in Tulsa, Okla., covers just 1,350 square feet and features a walk-in window for ordering, dual-assembly kitchens, drive-thru and a special pick-up window for mobile and third-party delivery orders.
The company said its goal with these new restaurant models is to reduce the cost of building new locations by around 20%, as well as giving it greater flexibility in where it can establish new locations. . When announcing the prototype, Jack in the Box said it would be a “huge boost” to its growth efforts across the United States, providing customers with more efficient restaurant operations and providing a unique opportunity attractive to potential franchisees.
Now that the Tulsa site has been up and running for a while, Jack in the Box is already reporting promising signs of success with the test. Chain executives said on an earnings call earlier this month that the Tulsa prototype exceeded sales expectations, according to Nation Restaurant News.
