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Jack in the Box Upgrades its Burgers

Jack in the Box this week is rolling out improved burgers as part of a year-long effort to upgrade both core menu products and its overall guest experience.

Speaking to analysts today, Jack in the Box Chairman-President-CEO Linda Lang said the chain is introducing burger patties with “improved taste, texture an juiciness” that have performed well in taste-preference research. The makeover includes new burger buns and new “saucing procedures” for crew. Advertising, merchandising and social-media buzz will support the upgrade effort.

The investment in better burgers comes despite continually rising beef prices. EVP-CFO Jerry Rebel called beef “the biggest wild card” in the volatile commodities market. He forecast a rise of 9% to 10% in prices for beef (20% of its commodity spend) for the company in 2012.

Improving the quality of core menu items is a popular strategy among QSRs. Wendy’s has introduced the Dave’s Hot ‘n Juicy Cheeseburgers with a thicker patty and better toppings, and it has upgraded its bacon. Sonic has improved its burgers, as well, adding the Loaded Burger line, quarter-pun hot dogs and real ice cream. Wendy’s, Burger King and others have revamped their fries.

Jack in the Box’s Lang told analysts that the chain also has improved its coffee, french fries and, most recently, bacon. Encouraging customers to try that new bacon was the reason the chain developed the $2.99 Jumbo Breakfast Platter promotion (at left) in August. That promotion helped make breakfast Jack in the Box’s strongest daypart in the fourth quarter of 2011. For that quarter—ended Oct. 2, 2011—systemwide same-store sales were up 3.1%, compared with a 3.3% decline a year ago. Other improvements this year have included modernized menu boards, new crew uniforms and crew training to increase speed of service and order accuracy.

Lang called the $2.99 breakfast promotion and the $3.99 Really Big Chicken Sandwich Combo deal in June “perfect examples” of value-priced meal bundle that are “meeting the needs of consumers.” More such promotions are likely in 2012.

Jack raised menu prices 1.4% in May, with another 1% boost in August. Rebel said Jack likely will be “a follower and not a leader” on menu pricing. In line with other QSRs, Rebel said Jack looks to stay below the rate of food-at-home cost inflation in deciding when and how much on menu-price increases.

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