More customers at Burger King and its sister brands are redeeming coupons and loyalty program rewards as inflation pushes menu prices higher.
Restaurant Brands International CEO Jose Cil told CNBC that the company hasn’t seen any significant change to what diners are buying from its restaurants. Its chains, which include Popeyes Louisiana Kitchen and Tim Hortons, have raised menu prices this year to mitigate rising costs for key ingredients like chicken and coffee.
But Cil noted that the broader fast-food sector is seeing low-income consumers spend less of their money on burgers and fries, while higher income diners seem to be trading down from casual-dining or fast-casual restaurants. KFC owner Yum Brands, McDonald’s and Chipotle Mexican Grill all recently told investors that they’re seeing the trend emerge.
Instead of selling fewer combo meals, Restaurant Brands’ eateries are seeing an uptick in customers redeeming paper coupons and loyalty program rewards to bring the price of their meal down.
“It suggests people are looking for good value for money,” Cil said.
Burger King has been pulling back on paper coupons in recent months in an effort to push those consumers to download its mobile app and join its loyalty program. In exchange for redeeming their points for free menu items, the burger chain learns more about its customers and how to target them more effectively with promotions and deals.
The strategy is part of a broader turnaround for Burger King’s U.S. business, which has been struggling to keep up with rival burger chains in recent quarters. Restaurant Brands plans to unveil a plan to revive the business in September.
Shares of Restaurant Brands rose more than 6% in afternoon trading after the company reported improving demand for Tim Hortons coffee and international sales growth at Burger King.