Burger King Worldwide Inc. (BKW - Analyst Report) recently added two more locations to its well-accepted delivery program, following which residents of Minneapolis, Minn. and Spokane, Wash. can now have the Whopper sandwich and hot crispy fries delivered to an address of their choice.
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 including the recent introductions, with a minimum food order of $10. A well-defined loyalty program is also in place.
Initially rolled out at a small number of Washington, D.C locations, this program has now been extended to 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, Salt Lake City and Denver. The expansion trail confirms that the program is gaining considerable customer acceptance.
At present, this Zacks Rank #2 (Buy) company has 1 live delivery restaurant each in Minneapolis and Spokane. While these locations act as training centers for crew members, Burger King plans to open 1 more delivery center in Minneapolis and 2 more in Spokane within one month to further expand its reach.
Following the new openings, Burger King will have more than 75 delivery units in the U.S. and several more in the offing. Basically, management intends to capitalize on its brand value by offering an off-premise service. We believe that the delivery system will prove to be a strong growth driver for Burger King in the years to come.
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 - Analyst Report), companies like Panera Bread Co. (PNRA - Analyst Report) and Jack in the Box Inc.'s (JACK - Snapshot Report) Qdoba Mexican Grill chain are benefiting largely from catering initiatives.