September 29, 2009

Price war at the burger hop

U.S. hamburger giant Burger King said it would go national with the $1 double cheeseburger promotion, a move that may put competitors on high alert.

The price for Burger King's double cheeseburger is $1 in 40 markets, but the corporation will go national with the price Oct. 19, The Chicago Tribune reported Tuesday.

Television ads for the new price often focus on the double cheeseburger sold by McDonald's Corp, which is smaller and priced at $1.19.

Then there's CKE Restaurants Inc., owner of Carl's Jr. and Hardee's, which sell the Big Carl and the Big Hardee each priced lower than McDonald's, the Tribune said.

Jack in the Box, in turn, dropped the price of the Big Cheeseburger to a dollar recently.

The burger war is in full tilt, there's no doubt about it, Dick Adams, a McDonald's franchise consultant said.

The deals may lure customers, but generally will not make franchise owners very happy. Burger King owners voted twice not to drop double cheeseburger prices to $1.

Bragging rights or not, franchise owners are also looking at profit margins, which are squeezed when promotions cut profits out of best sellers.