Burger King was founded in 1953 as Insta-Burger King, and it wasn’t until four years later that it introduced its most famous menu item, the Whopper, for just 37 cents (via Business Insider).
Fast-food giant Burger King runs around 18,500 outlets throughout the world and feeds 11 million people every day, making it the second-largest hamburger chain in the world behind McDonald’s (via Burger King).
The franchise, which previously released a multitude of new menu items each year, has recently shifted its focus and is now marketing its products as high-quality and preservative-free. As a matter of fact, Burger King recently prohibited 120 substances from their menu items (according to Men’s Health magazine).
So what is it that keeps Burger King’s menu so reasonably priced, especially in light of the fact that the chain is increasingly concerned with the quality of its goods and the origins of its components (as reported by Burger King)?
After all, in order to remain in business, the franchise must generate revenue. The explanation is that the corporation has developed very precise techniques that have enabled it to maximize profits while also passing the savings on to consumers in the form of low-cost food goods.
Burger King only sells menu items that are profitable for them.
Just like other fast-food restaurants, Burger King focuses on selling only those things on its menu that generate cold, hard revenue for the company.
This also implies that the restaurant simply maintains a small inventory of products that are used regularly to prepare different entries. If you think about it, when Burger King released tacos in 2002, it didn’t have to spend a lot of money on new ingredients because the company already utilized lettuce, tomatoes, and cheese in other menu items.
This saved the company money (via The Takeout). Furthermore, Burger King said in 2021 that it will cut its already restricted menu options in the United States in order to speed up its drive-thru service and enhance its sales (via CNBC).
Product markup is typically 100 percent, according to Business Insider, although certain things are marketed for considerably more than they are worth in other cases. In spite of the fact that soda is nothing more than a mixture of sugar and carbonated water, the average markup on a restaurant drink is an astounding 1,150 percent.
Therefore, it comes as no surprise that Burger King makes such a lot of money from the product. Because they can be produced in huge quantities and do not require a lot of labor, ice cream and fries are other cost-effective goods for fast-food restaurants, including those operated by Burger King.
Burger King is increasing the price of its low-cost menu items.
The low-priced menu items offered by Burger King have been enticing customers to the company’s restaurants for many years. McDonald’s introduced the $1 Your Way menu in December 2021.
It consisted of four products, all of which were priced at $1: a Bacon Cheeseburger, a Chicken Junior Sandwich, French Fries, and a soft drink (via Business Insider). Although the concept of putting up your own dinner is attractive, it is not all that it is built up to be.
While wise shoppers may refrain from ordering a $1 burger, which is claimed to bring Burger King only 6 cents, the majority of customers will spend their money on soft drinks and fries, which are the two items at Burger King that are the most excessively marked-up.
Burger King’s Kids Meals, which are family-friendly and appear to be reasonably priced, also attract adults who are likely to spend more money on other things on the menu after they eat there.
This method also prepares children to become future clients of the company – a potentially harmful association that, according to News Medical, can last a lifetime and generate significant profits for Burger King.
And the franchise doesn’t appear to be dismissive of this ruse: In the words of the Burger King website, “you can discover your favorite flavor early in life” by trying the Kids Meals.
Burger King makes money off of the extras
While side items such as Chicken Nuggets and Mozzarella Sticks may appear to be a low-cost supplement to your main meal, they generate significant revenue for Burger King.
This is due to the fact that the sides are often small and prepared in volume, making them both inexpensive to produce and quick to serve (via The Versed). Additionally, choosing to include so-called essentials such as French fries or a soft drink with your burger increases the earnings of the franchise by a significant margin.
At first look, cheese may not appear to be a valuable addition to a Burger King meal, yet it is a significant source of revenue for the company.
Although the Burger King website displays a cheesy Whopper, the burger does not come with cheese, and adding cheese will increase the price of the burger significantly. Inc.’s Geoffrey James provides the following explanation: “I recently placed an order for a Whopper, and the order taker inquired, ‘Do you want cheese with that?’ as is customary.
As an alternative to responding, I inquired, ‘How much does the cheese cost?’ ‘Fifty cents,’ came the response.” The cheese does not show as an option on the Burger King menu, nor does it display as a separate item on the customer’s bill of fare. Because of this, unless you inquire — or read this essay — you will never know how much it really costs.
It’s possible that Burger King’s value meals and special specials aren’t saving you as much money as you believe.
When purchasing food at Burger King, the majority of customers choose a valuable meal in the belief that they are saving money.
The truth is that they are receiving additional goods that they would not have received otherwise or that they may not even desire — and these are typically French fries and drinks, both of which are significant moneymakers for the business. Let’s look at the numbers.
A Whopper Jr. value meal, which consists of a burger, small fries, and a small drink, costs $5.29 and is available at participating locations.
These three things would cost $2.19 each if you purchased them separately: $2.99 for the Whopper Jr., $1.79 for a soft drink, and $1.79 for a small order of french fries because this comes up to $5.77, you are only saving 48 cents and are most likely spending more for products that you would not ordinarily purchase (via Fast Food Menu Prices).
Price reduction coupons and two-for-one deals are common marketing tactics used by fast-food restaurants to attract customers. However, while they may appear to be enticing, eateries are not always able to deliver on the promises made.
And Burger King is a good example of this. According to Nation’s Restaurant News, the restaurant was sued in 2018 for charging customers more for two Croissan’wich breakfast sandwiches when they used a BOGO coupon than they would have paid for a single item otherwise (through the website).
Burger King sells a substantial amount of food.
The huge volume of food sold at Burger King is maybe one of the most important reasons why the company is able to maintain its costs so low. The earnings of the restaurant chain are based on the fact that it has thousands of locations around the world.
Price reductions are also implemented in this context, with the franchisor anticipating that selling a large number of discounted items will result in a profit.
According to the BBC, this concept is founded on the theory of demand elasticity, which states: “If the demand for a product is elastic — that is, responsive to price changes — a corporation can raise its overall revenue by lowering its price.
For example, if a corporation cuts its pricing by 5% while increasing the number of units sold by 10%, then demand is elastic and total revenue increases “revenue will rise to the occasion.”
A large amount of food is sold by Burger King, not just because it is inexpensive, but also because it is readily available. And we’re not just talking about the number of stores or the availability of traditional delivery options.
Burger King announced a partnership with meal delivery company Uber Eats in 2019 to service customers across the United States (via Business Wire). That same year, the fast-food behemoth stated that it was investigating the feasibility of employing a GPS monitoring system to deliver food to vehicles stuck in traffic jams, among other things.
Following successful testing of the concept in Mexico City, Burger King stated that it will be expanding the endeavor to include Los Angeles. It appears that we will still be waiting (according to Nation’s Restaurant News).
Burger King takes advantage of low-cost ingredients.
One of the reasons Burger King’s offerings are so inexpensive is the company’s capacity to purchase ingredients in large quantities, resulting in significant savings. The fact that nobody wants to lose a client as large as Burger King means that the chain has enormous bargaining power when it comes to pricing (via Restaurant Engine).
Furthermore, the franchise frequently sources its ingredients from markets outside of the United States, albeit this is occasionally owing to both high prices and a scarcity of particular commodities in the United States (via Query Sprout).
Burger King’s sourcing policies have had a negative impact on the company in the past. A few years ago, Burger King was linked to a Brazilian company that grazes cattle on forest area that has been designated as a national monument (via The Guardian).
Since then, the fast-food company has attempted to repair its image by employing ecologically friendly packaging and preservative-free ingredients in its products.
Although the franchise scored a D in the Chain Reaction report for failing to take “public action regarding antibiotics in their supply chains,” the franchise received a F in the 2021 report (via Consumer Reports).
If we go back further, Burger King’s beef was called into question in 2013 after a European meat supplier was accused of selling horse meat that was labeled as beef. Burger King responded to the accusation by conducting DNA testing, which apparently revealed that there were no traces of horse meat in the franchise’s burger patties (via Popular Ask).
Burger King pays its employees very little money.
Burger King, like its competitor McDonald’s, makes use of low-wage workers to lower costs. Across the fast-food industry, the average hourly wage is $9.32, with Burger King paying its team members $9.73 per hour on the job.
However, even if this is marginally higher than the industry average, if a Burger King employee works 40 hours per week for 52 weeks a year, their yearly salary will be $20,238, which is significantly lower than the median annual compensation in the United States of $41,950.
As a result, it shouldn’t come as a surprise that employees at a Burger King location in Nebraska resigned in droves in 2021. While on their way out of the eatery, the employees placed a sign outside the establishment that said, “We’ve all decided to call it quits… Please accept our apologies for any inconvenience ” (via Independent).
As part of its ongoing effort to reduce personnel expenses even further, Burger King has recently begun putting self-service kiosks in its locations.
Clients can choose their meals and pay for them before even reaching the counter, thanks to the unaided digital ordering platforms available. Wayne Tailor, Deputy Manager at Burger King at Manchester International Airport, shared his thoughts “They have raised our production by a factor of ten.
Because of the increased number of employees assembling orders, we are able to boost the speed of service as well as overall productivity within the unit ” (via Acrelec).