SHANGHAI -- A chicken-packed menu and plans to shun television
advertising are two ways Burger King Corp. hopes to succeed in China, Chairman
and Chief Executive Greg Brenneman says.
"China is a big market, an important market and one where we
need to play a role," he said in an interview, ahead of today's planned opening
of the chain's first restaurant in China. The appetite for Western-style
fast-food, he said, "looks like it's growing exponentially."
Burger King's arrival is just the latest sign that U.S.
fast-food companies are rushing for footholds in China's richest and most
populous city. A top Wendy's International Inc. official was in Shanghai
last week scouting opportunities, and meat-maker Hormel Foods Corp. may
open hot-dog stands, people familiar with the plans say. The companies had no
immediate comment.
Burger King's initial plans in China are modest. The
Miami-based fast-food chain intends to concentrate in the Shanghai area. Mr.
Brenneman declined to predict how quickly Burger King might grow in China, but
said logistical challenges mean it needs to build critical mass in a single city
first.
Yet, gone are days when a hunger for foreign food guaranteed
the success enjoyed over a decade ago by Kentucky Fried Chicken, now a unit of
Louisville, Kentucky-based Yum! Brands Inc., and McDonald's Corp.
Competition from foreign -- and local -- brands is keeping prices low: Burger
King says its menu in Shanghai is priced at 40% to 50% of the U.S. level.
Some global chains already in China have been slow to expand.
Domino's Pizza LLC, for instance, has just six restaurants in China, all in
Beijing. Some have even pulled out, such as Schlotzsky's Deli Inc. of Austin,
Texas. For Wendy's, entry to China would be its second look after a franchise
plan in the late 1990s stalled.
McDonald's recently put its China team under new management and
cited "weakness in China" in a global sales report last month. The company this
month also pulled an advertisement criticized by some in China for showing a
customer begging. A McDonald's spokeswoman didn't return calls for comment.