Burger King parent company Restaurant Brands International (RBI) reported its second quarter earnings today and said that more customers are redeeming coupons and loyalty rewards than in the previous year. The company also said that more customers are spending more money per order, which partially explains the rising costs of menu items on the chain’s restaurant menus. For example, if you have five or more coupons redeemed with each visit, your meal will cost no more than $5 plus tax, or one beverage and three sides at participating locations.
With higher prices across the board at Burger King and its sister brands, more customers are redeeming coupons and loyalty program rewards.
The head of Restaurant Brands International, Jose Cil, told CNBC that his company hasn’t seen any drastic changes in the dishes customers are buying. Its chains, including Popeyes Louisiana Kitchen and Tim Hortons, have increased menu prices this year in response to rising costs for key ingredients like chicken and coffee.
In the broader fast-food sector, Cil noted that low-income consumers are spending less of their money on burgers and fries while higher-income diners seem to be trading down from casual dining and fast casual restaurants. Yum Brands, McDonald’s, and Chipotle Mexican Grill have all told investors they are seeing the trend.
Instead of reducing the price of fewer combo meals, the Restaurant Brands stores are seeing an increase in customers who redeem coupons and rewards from the loyalty program, to make the cost of their meal less.
cil claimed it suggests people are looking for good value for money.
In recent months, Burger King has reduced the number of paper coupons in an effort to encourage customers to download its mobile app and join its loyalty program. As part of a promotion, the fast food chain exchanges their customer’s points for items on the menu, which they then use to determine more information about their customers, what promotions they’ll have in the future, and which items they should try to feature in the menus.
Burger King has been struggling to keep up with rival burger chains in recent quarters. This move is part of a broader turnaround plan for the company. The company plans to announce a plan to revive the business in September.
Shares of Restaurant Brands increased by 6% in after-hours trading after the company reported an improvement in the demand for Tim Hortons coffee and growing sales of Burger King abroad.