Burger King pulling slice from double cheeseburger

Wed Feb 17, 2010 9:19pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Lisa Baertlein

LOS ANGELES (Reuters) - Burger King Corp is taking a page from the playbook of McDonald's Corp and pulling a slice of cheese from its $1 double cheeseburger.

Starting on April 26, the fast-food chain will sell a "BK Dollar Double" with two burgers and one slice of cheese, Burger King said on Wednesday. That's six days after the company raises the price of the $1 double cheeseburger to a suggested $1.19.

Burger King and McDonald's have successfully used $1 burgers to lure diners into stores. McDonald's raised the price of its popular double cheeseburger to a suggested $1.19 from $1 in December 2008.

Stifel Nicolaus analyst Steve West estimated that every cheese slice costs 1 cent to 2 cents -- translating into roughly 1 to 2 percent of the gross revenue from double cheeseburgers.

"When fully loaded with labor and other overheads, franchisees told me it was being sold at a loss," he said.

Burger King recently signaled plans to end the $1 double cheeseburger promotion in the spring and to replace it with another item. The double cheeseburger boosted traffic but angered franchisees.

The promotion prompted the National Franchisee Association to sue Burger King in November in Miami federal court. The association said the company did not have the right to enforce maximum pricing rules.

A spokesman for the association, which represents Burger King franchisees, was not immediately available for comment on the new double cheeseburger pricing.   Continued...