McDonald’s premium push shows it is ready to gobble up Byron’s business
McDonald’s looks to be staking its claim for the premium burger market as the fast-casual sector hits the rocks.
2017 marked a decade of posh burgers in the UK. From Byron, Gourmet Burger Kitchen and Honest Burger to the slick, paired back operation introduced by American chain Five Guys, pimped-up burgers have become a mainstay of British culture.
When Byron burst onto the scene in 2007 some wondered if this new wave of burger dining would sound the death knell for McDonald’s, the established chain of choice for more than 40 years.
A decade on and such predictions have been proved wrong. Only yesterday (5 March) accountancy group UHY Hacker Young reported that one in three of the UK’s top 100 restaurant groups are loss-making, a 75% rise over the past year alone.
Mid-market casual dining chains from Jamie’s Italian and Barbecoa to Prezzo and Strada have all been hit by overstretching themselves in a rapidly saturated market. Prezzo alone has confirmed the closure of 94 restaurants, a third of its outlets, while the Jamie Oliver Restaurant Group is closing 12 of its remaining 37 Jamie’s Italian restaurants.
Byron is another notable casualty. In January, the premium burger chain agreed to close 20 restaurants as part of a rescue plan, committing to operate a “smaller and more efficient restaurant estate”.
READ MORE: When brands lose their cool: What next for Byron and Deliveroo?
This mixture of dwindling consumer confidence and a saturated fast-casual dining sector has left space open for a confident, established player like McDonald’s to satisfy consumer demand for premium burgers served at your convenience.
Cue a renewed push for the premium sector, with McDonald’s upping the marketing spend around its Signature Collection by becoming the 2018 broadcast sponsor of ITV’s Rugby Six Nations coverage during February and March.
Developed by Leo Burnett, the creative plays on the light-hearted McDonald’s style by showing rugby players in a number of different settings displaying ‘A Touch of Class’. The TV ads are complemented by a social campaign running across Instragram, showing a glamorous model surrounded by a sea of green chillies eating a Signature Collection burger.
These social ads mirror the ‘Love affair – Luxury in a bun’ TV campaign first launched in August. Parodying the lurid glamour of a perfume advert, the film shows a beautiful young woman in a flowing dress fantasising over and later devouring a Signature burger. Here is McDonald’s taking a healthy swipe at the pretensions of the premium burger market.
The chain actually first released its three Signature burgers – The Classic, The BBQ and The Spicy – in 2015. Created in collaboration with a ‘Chef’s Council’ of food specialists, the burgers promised thicker patties made from 100% British and Irish beef served in a brioche bun, with Beechwood smoked bacon, jalapeño slices and Pepper Jack cheese.
Initially available in 28 restaurants, consumers can now get their hands on the Signature Collection in 150 restaurants nationwide. Coming in at £4.69 for a burger or £6.19 for a whole meal, the Signature Collection is still a long why short of the £12.50 charged by Byron for a double bacon cheese burger, with fries costing at additional £3.
With the fast-casual market continuing to implode, McDonald’s has sensed now is the right time to pounce. The brand is also likely buoyed by the rapid success of food delivery players like Deliveroo and Just Eat, the latter of which in December broke into the FTSE 100 with a valuation of £5.5bn.
This is also a significant year for McDonald’s in the UK as it marks the 50th anniversary of the Big Mac. The brand has sought to reaffirm its close connection with the British public through a nostalgic TV campaign showing people throughout the decades having their first Big Mac.
McDonald’s is also confidently focusing on its global ambitions, making a play for emerging markets with the promotion of UK CMO Alistair Macrow to CMO of high-growth markets. Announced yesterday (5 March), the appointment will see Macrow lead the marketing strategy for China, Hong Kong, Italy, Poland, Russia, South Korea, Spain, Switzerland and the Netherlands.
The news comes off the back of healthy full-year results for the chain, which saw McDonald’s global sales rise by 5.3% and operating income soar by 23%.
As the premium burger chains contemplate the future of their brands in the UK, full of confidence, McDonald’s is cranking up a gear and coming for their business.
