Thursday, January 22, 2004

Hardee's new line: Beefier burgers

By Emery P. Dalesio
The Associated Press

ROCKY MOUNT, N.C. - It's about as low as a fast-food chain can go.

In a black-and-white television ad for Hardee's, chief executive officer Andrew Pudzer looks into the camera and confesses that his company has had "a lot of problems." Pudzer admits what is already known by millions of fast-food loving Americans who have long avoided Hardee's: The burgers just weren't tasty.

It's a stark confession, aimed at highlighting the radical turnaround being attempted by the 42-year-old chain, which got its start in this small North Carolina city.

While goliaths like McDonald's, Burger King and Wendy's have offered products at steep discounts to spur traffic during the nation's economic slump, Hardee's has decided to go upscale.

Gone are the same small hamburgers that competitors discount at $1 or less, in favor of "thickburgers" - Angus beef burgers of up to two-thirds of a pound.

Still to be seen is whether consumers will pay more - and wait longer - for what Hardee's promises is a better burger.

"You're willing to risk a little more when you're down," said Bill Boddie, chief executive of Rocky Mount's Boddie-Noell Enterprises, the restaurant chain's largest franchisee.

A year ago, Hardee's borrowed a concept from its West Coast sister chain Carl's Jr. - both are owned by CKE Restaurants Inc. of Carpinteria, Calif. - and introduced a half-pound burger selling for $3.95 that was promised to be on par with a $6 sandwich at a casual sit-down restaurant. That's been followed by a collection of burgers ranging from 1/3 pound to 2/3 pound using higher-quality Angus beef.

Last month, Hardee's and Carl's Jr. moved to attract low-carb dieters by offering a 1/3-pound burger wrapped in whole leaf lettuce.

The meat in the new offerings takes longer to cook and every sandwich is made to order, meaning longer waits for customers in a hurry. Walk-in customers are asked to have a seat and wait for their food to be delivered on a tray, while drive-thru visitors are idling in longer lines.

"It has definitely made a change. Our sales are showing it," said Mike Boddie, the head of Hardee's operations for Boddie-Noell Enterprises.

There are about 2,400 Hardee's restaurants in 32 states, mostly in the Midwest and Southeast, and 11 foreign countries.

The chain lost its way in the past decade, said the Boddie brothers and Brad Haley, a marketing vice president for Hardee's Food Systems, based in St. Louis.

Mama Cass once serenaded customers to "Hurry on down to Hardee's, where the burgers are charcoal-broiled." Later, the chain junked the burger grills for flat-metal sheets that fried the meat and promoted roast-beef sandwiches, fried chicken and handmade breakfast biscuits.

"I think the combination of doing a whole bunch of things and going from char-broiling to frying, it just wasn't a good move," Haley said. "We felt we had to pare back the menu significantly and do something better than anybody else."

Nearly every Hardee's restaurant has made the transition.

For the three months that ended Nov. 3, sales at company-operated Hardee's stores open at least a year increased 6.8 percent. Same-store sales for the 11 months ending Dec. 29 rose by 1.7 percent compared with the previous year, when sales were down by 1.8 percent.

By comparison, McDonald's said same-store sales rose 2.4 percent last year.

Cable prices moving higher
How local rates have gone up

Third- World artisans benefit
Poll finds one-third optimistic
Office-space market should recover slowly
Peale: Lillian intends to survive through speaking fees
Provident ready to expand
Tristate summary
Unions back suit against Cintas
Comair, FAA settle $44K suit
LSI Industries reports rise in revenue and earnings
Housing activity best since '78
Lots of questions for Stewart jury
Business Digest
Hardee's new line: Beefier burgers
Music industry resumes suits