threat of burger price war grows

By Christina Golding

Owners of independent burger bars and small chains need to promote themselves better to protect their market share against the rapid expansion of the dominant chains, say market researchers.

The UK could be in for a repeat of the burger price wars seen in the USA, according to research firm Foodservice Intelligence (formerly Marketpower).

McDonald's, which has 830 restaurants in the UK, plans to open 100 restaurants this year. It has also reiterated its promise to create 5,000 jobs by the millennium. Burger King, which has 455 restaurants, plans to open a further 55.

"The impact on the independents won't drive them out of business but it will wake them up. They will have to fight harder for their market share and promote themselves better," said Foodservice Intelligence publications manager Umesh Raichada.

Some independents doubt that the increased competition will result in a price war.

"There are no great benefits from a price war. In the States this has created gross unrest with franchisees because their margins were so compromised," said Simon Daws, franchise manager of the Burger Star chain, which has eight outlets in the South-west.

"We feel quite bullish about our own expansion. The market-place is far from saturated," he added.