Burger King Expands Delivery Program - Analyst Blog

By Zacks | July 12, 2013 AAA

Salt Lake City, Utah residents can now have the Whopper sandwich and hot crispy fries delivered to their chosen addresses as Burger King Worldwide Inc. (BKW) recently announced the expansion of its home delivery services to two participating restaurants in the city.

Last year, the company initiated this new sales initiative, BK Delivers, to counter sluggish same-store sales performance in a highly competitive environment. This initiative was intended to take Burger King beyond its outlets and deliver to its customers in their homes, schools and offices and further enhance the company’s presence.

The service allows people to select from a wide range of popular items as well as recent introductions, with a minimum food order of $10. A well-defined loyalty program is also in place.

Initially rolled out at a few Washington, D.C. locations, this program has now been expanded into a number of markets like Boston, New York, Miami, Houston, Los Angeles, Chicago, San Francisco Bay Area, Las Vegas, Sacramento, greater Washington, D.C., Phoenix and Denver. The expansion trail confirms that the program is gaining considerable customer acceptance.

With the latest delivery restaurants in Salt Lake City, the total number of delivery units in the U.S. now stand at 75 while several more are in the offing. Basically, management intends to capitalize on Burger King’s high repute by offering an off-premise service.

Of late, home delivery and catering programs have become a trend in the U.S. restaurant industry. While the delivery system is doing the trick for pizza chains like Domino's Pizza Inc. (DPZ), companies like Panera Bread Co. (PNRA) and Jack in the Box Inc.'s (JACK) Qdoba Mexican Grill chain are benefiting largely from catering initiatives.

We believe that the delivery system will prove to be a strong growth driver for Burger King in the years to come. Burger King currently retains a Zacks Rank #3 (Hold).

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