Burger King has maintained a foothold in the fast-food world due to its incredible burgers and budget-friendly prices. The fact that the food is tasty and cheap has caused many to wonder how the two can be compatible.
Is it possible for food to be high quality, taste great, and also be inexpensive? If you have wondered about this yourself, read further to learn the answer!
Why Is Burger King So Cheap?
Burger King can offer consistently low prices due to buying wholesale products in bulk. Additionally, price reductions can occur when the franchise partners with soda and food manufacturers. Also, Burger King understands its demographic needs and markets to them accordingly, increasing its profits.
These factors are among the numerous reasons why Burger King’s food is so inexpensive. If you want to learn more reasons why Burger King has low prices, keep reading!
1. Low-Cost Labor
Burger King is cheap for the same reason as companies like Walmart are; it creates its product via low-cost labor that offers employment opportunities.
Now, this is not entirely bad in and of itself, as Burger King offers entry-level jobs to inexperienced workers.
For this reason, it can pass savings on to the consumer in the form of great food at a lower price.
2. Buying in Bulk
Via its parent company, Restaurant Brands International, Burger King franchisees can purchase surplus products from manufacturers.
Because of this, it can pay for these items at a much lower cost.
For example, when Burger King purchases soda, it does so from companies that lower the original prices, making them lower in cost.
Then, Burger King can pass the savings onto you in the form of inexpensive menu items.
3. Wholesale Pricing
Fast food companies like Burger King purchase a lot of products from discount and bargain manufacturers.
Unlike the companies mentioned above, wholesale and discount marts already offer a low price for their products.
Additionally, these companies may provide further discounts for products that may be irregular in some ways but are still usable.
That said, these types of deals allow Burger King to offer incredible savings to the American consumer.
4. Upselling and Markups
Although some patrons of Burger King don’t quite understand why Burger King charges for extra cheese, the reason is sound.
For example, the upsell allows the burgers without cheese to cost a lot less.
Additionally, markups, when a business charges a bit more for an item they sell, allow the industry to cut costs elsewhere.
With that, these standard practices give Burger King the ability to make $1 value meals possible.
Being a family-oriented company combines both upsell and markup strategies by introducing children into the mix.
For example, foods manufactured and aimed towards kids are not as expensive to make and can entice adults into restaurants.
Of course, the upside is that the fast-food joint can now charge mom and dad a bit more for their meals.
Additionally, this tight balancing act helps keep prices low, resulting in higher ROIs for the business.
6. Competitive Marketing
Dollar menus and limited offers go hand and hand, as the occasional introduction of specialty foods allows Burger King to provide customers with discount pricing.
A form of markup, this strategy works as it helps reinvigorate Burger King’s brand while enticing buyers to try items on the regular menu.
Nearly every fast food restart has done this. However, Burger King has turned it into art.
Many of the limited items it offers, like the Cheesy Tots, have become so popular that they regularly appear, often increasing Burger King’s sales.
7. Burger King’s Customer Base
Burger King’s main customer demographic falls in the lower-income brackets. Due to this fact, Burger King has to be ever mindful of keeping its prices low to retain loyal customers.
Subsequently, Burger King has to locate manufacturers and distributors who can offer products at a lower price.
Then, lower prices allow Burger King to keep its consumer base willing and able to purchase more.
8. Burger King’s Parent Company
Burger King’s parent company, Restaurant Brands International, has been in the fast-food game for some time.
As the owners of Tim Hortons and Popeyes, they grasp how important it is to make deals with suppliers that can distribute to their franchises.
Always on the bleeding edge of technology and marketing, RBI employs a host of methods to offer franchise campaigns that allow them to keep prices low.
9. Government Subsidies
While some aspects of this practice are a bit controversial, it has been known that corporate fast-food chains have been against obtaining government subsidies for many years.
For example, these subsidies help offset the cost of food production at restaurants, helping keep consumer costs down.
On the other hand, consumers have pointed out that it is somewhat unfair to pay cheap labor wages while allowing subsidies to support higher CEO salaries.
It is a fair point since paying entry-level workers a bit more would not significantly impact the cost of food at Burger King.
10. Economic Surpluses
When there is an upturn in the economy, manufacturers gain confidence and start to produce, creating surpluses that companies must get rid of to turn profits.
In addition, these types of surpluses benefit fast-food restaurants like Burger King, as these commodities will often include dairy, chicken, beef, and other staples.
In the long run, a booming economy will always result in substantial bargains for the American consumer.