Burger battle looms large at Carl's Jr. chain

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CKE Restaurants' Carl's Jr., eschewing the low-price promotions of other fast-food chains, today goes patty to patty with casual-dining restaurants for a share of hamburger sales.

Carl's Jr. is introducing a half-pound single-beef-patty hamburger comparable in size to those served at Applebee's Neighborhood Grill & Bar and Red Robin. Topped with two cheese slices, red onions and pickles, the sandwich sells for $3.95 but is being called "The Six Dollar Burger" to compare it with higher-priced offerings standard on casual-dining menus.

While the product itself isn't new, the positioning is a break from the "big appetite" approach fast-feeders typically have used to entice heavy users-namely, ravenous young men who don't care about calories. "Many other burger chains have now or have had many other large-size burgers, including Carl's, but not with this type of quality positioning," said Bob Sandelman, president of consultant Sandelman & Associates.

He said the chain's point of differentiation over the years has been as a premium burger purveyor. Now, Carl's is taking on casual dining and the fast-casual hybrid, which are two of the better-performing sectors in the restaurant industry, in part, because they cater to the more discriminating tastes of wealthy and well-fed baby boomers. "A lot of that stems from the fact that as people have aged they are now more able and willing to pay for higher-quality food they feel they deserve in the age and stage of life they are in," Mr. Sandelman added.

In spots launching July 2 in Los Angeles, and rolling later to other markets, agency Mendelsohn/Zien, Los Angeles, pokes fun at the restaurant-dining experience. In one spot, patrons have to put up with a diner being serenaded with "Happy Birthday" at the next table. In another, a too-happy waiter named Chip tries to interest customers in dessert-before they've had their main course. Spots end with the copyline "Wouldn't it be nice if you could just get one of those great $6 restaurant burgers ... without the restaurant?" Spots will be expanded into Carl's Jr.'s 12-Western-state region through August. Radio, featuring people on the street sampling the product, will air in the 18-to-49 year-old target market for the big burger.

The campaign marks a shift in the estimated $50 million account away from advertising featuring people eating with exaggerated chewing sounds and tagged "Don't bother me, I'm eating." A second campaign showed confused young men with the tag, "Without us, some men would starve." Richard Zien, president-CEO of Mendelsohn/Zien, said those tag lines may return following the launch which he called "The single-largest focus of the year for Carl's Jr.'s."

The single-patty half-pounder represents a departure from fast-food tradition as well. Most chains opt for multiple quarter-pound patties to increase the heft of their burgers because they are easier to manage operationally and work within existing cooking specifications. "Everyone wants to make sure there's no undercooked hamburgers because of concern about food safety," said Dennis Lombardi, of consultancy Technomic. "It's not insurmountable but a lot of restaurants weigh factors such as ... cooking-size complications" in deciding whether to opt for a single or double patty.

Aiming at casual-dining restaurants isn't that much of a stretch, considering a study last year by McKinsey & Co. for Food Distributors International. The study found that in the next decade, growth in full-service restaurants will outpace that of quick-service. The study also predicts fast-feeder growth will slow to 1% through 2010, from 2.3% over the past five years.

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