A long-awaited sandwich line at KFC Corp., along with Burger King Corp.'s new Chicken Club sandwich, drew a strong following in October, their first full month on the menu, according to company spokesmen, franchisees and industry observers.
Even better, it appears the products haven't eaten into sales of other KFC menu items, but instead boosted business overall.
"The month of October was a gangbusters month for us," said KFC franchisee John Neal, president of JRN Enterprises, Columbia, Tenn. "The sandwiches are very strong. We are extremely gratified."
KEEPING UP MOMENTUM
The trick, observers said, is to keep up the momentum without the heavy network TV support both chains lavished on the launches.
KFC had some $75 million in its war chest for the introduction of its five-item product line that includes Tender Roast and Triple Crunch, the latter with spots currently on air from Y&R Advertising, New York. Burger King laid out about $35 million to back its four-week network effort for the launch via Lowe Lintas & Partners Worldwide, New York.
THREAT FROM MCD'S
Early success aside, the chains must guard against a potentially huge competitive threat from industry giant McDonald's Corp. Next year, the 12,500-unit chain will launch its own new line of chicken sandwiches, which have been well received in test markets (AA, July 12).
KFC, with its heritage as a chicken dinner expert, spent two years searching for the right sandwich line. The chain wanted to boost lunch sales, and get a piece of the chicken sandwich business that was being gobbled by burger chains like Wendy's International and regional players like Jack in the Box and Carl's Jr.
"We want our fair share. There's a $4.5 billion [chicken sandwich] market," said Mr. Neal, who operates 100 KFCs. "You've got everybody and his dog selling a chicken sandwich and we didn't have any market share."
Since the Sept. 19 launch, KFC's same-store sales have increased in the low- to mid-single digits compared with the same period last year, said David Rose, who tracks KFC parent Tricon Global Restaurants for Jefferies & Co., Los Angeles. "I think the sandwiches will do well for them," he said.
The increase comes after a disappointing summer at the 5,200-unit chain. For the third quarter ended Sept. 4, same-store sales slid 2% at KFC.
Burger King's Chicken Club helped buoy sales at a time of steep sales declines. For the six months ended June 30, before the launch, sales were down 5% at the nation's No. 2 burger chain. While a spokeswoman declined to discuss actual sales results, she indicated same-store sales have been positive since the Oct. 3 introduction.
"They flew out of our restaurants," she said of the sandwiches. "Sales have exceeded projections." At one point, some restaurants ran out of bacon, a key ingredient in the sandwich, which is made from a fried chicken patty, and dressed with bacon, lettuce and tomato.
The sandwiches at McDonald's, McCrispy Chicken and Chicken McGrill, will be launched next year as part of the chain's effort to boost the quality of the food it sells. That system, dubbed Made for You, is expected to be rolled out chainwide shortly. The sandwiches likely will be advertised as a duo, observers said.
ADS FOR L.A.
The chain has already backed them with TV commercials in spot markets, including San Diego, via regional agency DavisElen, Los Angeles. The chicken products, a higher quality than the existing chicken offerings on the menu, will be featured with TV spots in Los Angeles early next year, said an executive familiar with the plans.
A McDonald's spokesman declined to discuss chicken plans. He did say the chain isn't concerned about chicken taking away from core burger sales.
"Our focus is on gaining share of stomach," he said. "The customers write our