Reply #27: Puzder mentioned in a few articles [View All]

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that it is part of their strategy to capture a market share that McDonald's doesn't go after. http://www.burgerbusiness.com/?p=1722

"CKE: New Burgers and Snacks But No 99-Cent Marketing

Carl’s Jr. and Hardee’s are testing lower-price snack-menu items, but don’t look for the chains to join the 99-cent bandwagon, says CKE Restaurants CEO Andrew Puzder.

Presenting today at Oppenheimer & Co.’s 9th Annual Consumer, Gaming, Lodging & Leisure Conference in Boston, Puzder said CKE’s two chains will continue to focus marketing on large, premium-price burgers (such as the new Teriyaki Burger at right) and to target that marketing at “young hungry guys” who make up its core audience. He defended the chains’ “hot chicks eating burgers” TV strategy as a way to grab attention and “break through the clutter. We can’t be McDonald’s. McDonald’s spends $800 million ; we spend $120 million,” he said.
Andrew Puzder

<snip>

In the most recent reporting period, ended June 15, Carl’s Jr. same-store sales were down 7.1% vs. one year ago; Hardee’s sales were down -2.7%. “We’re still selling as many premium burgers but we are not selling as many combos,” Puzder said. “We’re seeing customers order a $6 Thickburger and a glass of water.”

CKE will rebuild sales with unique, premium-price products, he said, not with discounts. “We will not spend ad dollars trying to attract 99-cent customers,” Puzder added. “We have great 99-cent products but we don’t promote them, which is why we have higher margins than our competition.” Short-term planning trades brand equity for small sales gains, he said, and CKE won’t do it. Carl’s Jr. and Hardee’s are testing new lower priced snack items. But the chains will avoid couponing. “We don’t want to be seen as a place where you can get cheap, bad food for very little money,” he said."



Another article had him quoted as saying that they have healthy items for sale, but no one orders them so they don't advertise them. That seems backwards to me, but I'm not a CEO. ;) Evidently their strategy backfired though, since their target market (guys 18-34) don't have money to spend, since many are unemployed or brown-bagging to save money. There are so many better options for burgers in the Bay Area alone, I don't see how a chain like Carl's thought it was going to capture the "boutique" burger eater with fast-food.

That's probably more than you wanted to know, but I still had the link up in my browser so I thought I'd post it. At any rate, I'd say that the cost of doing business in CA seems to be the least of their worries.