In the wake of its first poor quarterly sales performance in four years, the fast-food chain is taking a hard look at its advertising to make sure it can keep its edge.
Carl's Jr., which gave up a focus on price in 1994, also is looking at fixes that include a new value offering -- a $1.59 burger with bacon and cheese. And, in a bid to spark breakfast sales, the chain has just added a croissant sandwich with bacon, backed with radio ads.
The company's attention-getting TV campaign, from Mendel-sohn/Zien, Los Angeles, has played a big part in a turnaround at the 874-unit restaurant company after major struggles in the early 1990s.
REPORTS 4.7% DECLINE
Last week, corporate parent CKE Enterprises said same-store sales at company-owned Carl's Jr. fell an estimated 4.7% for the quarter ended May 17.
"Carl's is now under-performing its closest peer, Foodmaker's Jack in the Box," said Merrill Lynch & Co. analyst Peter Oakes.
That chain, also with a noted ad campaign, posted a "stellar" 9% gain in same-store sales while Carl's struggled, Mr. Oakes said.
No agency review is expected for the $40 million Carl's Jr. account, a spokeswoman said.
The current campaign is expected to run through the rest of the chain's fiscal year, ending Jan. 31, according to an executive close to the chain.
"We feel we may need to turn up the heat a little bit," the spokeswoman said. "The challenge with a campaign that has been running for four years is to get attention."
With plenty of shots of splats of ketchup and the "If it doesn't get all over the place, it doesn't belong in your face" theme line, the humorous and sometimes offensive TV spots target core fast-food customers, young men with huge appetites.
One popular ad starred ex-NBA star and bad-boy Dennis Rodman. Another showed guys gawking as a buxom woman in white took a bite of her burger.
There was a recent warning sign of trouble: A new ad featuring the Three Stooges in a food fight brought no consumer complaints.
MORE COMPLAINTS, MORE SALES
"We found traditionally that with advertising we receive more complaints about, the sales do better," the spokeswoman said.
Hopes are high for a new radio campaign launched in April with Jim Rome, the brash and acerbic host of a hugely popular syndicated sports show. The spots jab at fast-food competitors.
One spot goes after McDonald's Corp.'s Teenie Beanie Babies Happy Meal promotion, with Mr. Rome saying he'd go to McDonald's if he didn't have to "watch 3-year-old kids screaming through the place to get to the Beanie Babies."