Amrest is also keeping its strategy for the brand under wraps. „We are a public company that has to ensure equal access to information to all investors. I can say that we will open a few more restaurants in Poland this year,” says Burger King‘s brand president, Olgierd Danielewicz. „As for the coming years, I can promise that we will be growing dynamically.”
He disclosed that the company‘s expansion strategy includes both big cities as well as suburbs and smaller towns. „In a relatively short time, people will be able to find us in many places across the country,” Danielewicz promises, adding that he is confident that the brand will be successful.
Good timing
Experts share his optimism. Analyst Jacek Buczyński from Biuro Maklerskie BPH sees merit in Amrest‘s decision to bring Burger King back to the Polish market. „The brand‘s high recognition is definitely an advantage,” he claims.
The growing popularity of QSRs in Poland and the buoyant economy also create advantageous conditions for Burger King. „It‘s a very good moment to enter the market - fast food is becoming more and more popular in Poland,” says Tomasz Kaczmarek, an investment advisor from brokerage house Dom Maklerski BZ WBK. „People have less time and more money. Plus, the image of fast food has greatly improved due to marketing campaigns,” he explains.
The question is, however: How big a bite of the market will Burger King be able to take? The chain‘s main competitor in the hamburger sector, McDonald‘s, is showing a strong performance on the Polish market. Last year it posted revenues of zł.668 million, up 17 percent from 2005. Its net profit grew to nearly zł.40 million - a 47-percent increase. The firm has 209 restaurants (including 51 franchise outlets) in nearly 90 municipalities in Poland.
So it‘s no surprise that McDonald‘s does not feel threatened by the competition. „We respect the competition but do not fear it,” says the company‘s director for corporate affairs, Krzysztof Kłapa. „There will be no revolution in our approach to the market - neither in terms of price nor in terms of product,” he adds.
BPH‘s Buczyński reckons McDonald‘s will not lose customers in the short-term. „But constant growth by Amrest‘s restaurants and by [low-cost restaurant chain] Sphinx will probably take some of the market away from McDonald‘s,” he said.
Old newcomer
Burger King‘s first foray into the Polish market ended in 2001, after seven years of operation. The chain had difficulty competing on price with McDonald‘s, whose well-oiled supply network helped it to keep costs to a minimum.
Amrest says history will not repeat itself. „Burger King is coming to Poland with Amrest this time,” stresses Danielewicz, explaining that the company has the capacity, resources and experience to bring global brands to the CEE region. Amrest officials explained Burger King‘s supply network will be made up of both Polish and foreign suppliers, with the number of local providers expected to increase over the coming years. When it comes to pricing, Amrest‘s Piotrowski says, „More food for the same amount of money.”
But Kłapa points to another factor that could make life difficult for the „old newcomer.” „The scarcity and high price of good locations presents a problem,” the McDonald‘s representative says, adding that the number of attractive spots in the centers of big cities is becoming increasingly limited.
That doesn‘t discourage Amrest. „We are a recognized brand operating more than 200 restaurants across a range of brands in the QSR sector � Our people, brand and scale make us a good partner for developers,” Danielewicz explains, but he would not disclose any details on planned locations.
Negative images
Fast-food outlets, or rather „food-served-fast” restaurants, as Kłapa likes to call them, have undergone some changes in recent years. These coincided with some negative portrayals of QSRs in the media over the past couple years. Movies such as Super Size Me and the more recent Fast Food Nation have blamed QSRs for the increasing obesity levels around the world and questioned their products‘ nutritional value.
Kłapa says the effect on the market was muted. „We have survived the movies unscathed,” he insists.
On the other hand, it is hard not to notice that the McDonald‘s menu has undergone some changes over the last few years. It offers more salads, an apple with every children‘s Happy Meal and nutritional information is available upon request. Kłapa denies that this is a reaction to media portrayals.
„We changed our approach to food prior to the release of the films,” he says. „It is the result of changing times and the pressure from our consumers, who are more diet- conscious.”
Burger King will offer some healthier products of its own. „We will offer a range of ’lite‘ products, that will provide choices to satisfy the tastes and needs of all our guests,” Danielewicz says, adding that Burger King‘s meat is broiled and low in sodium. Information on nutritional content can be found in its restaurants as well as on the internet.
Restaurant redesign
The changes are not limited to the menu. QSRs are also undergoing interior redesign and renovation. Amrest‘s KFC wants to redesign its restaurants so that they have more windows and thus more natural light and more wooden furniture inside. The wall decorations will combine international elements with specific local ones. „We are working with the Academy of Fine Arts in Warsaw,” KFC‘s brand president, Drew O‘Malley, said.
McDonald‘s has already modernized 20 of its outlets, and soon the number of renovated restaurants should reach 30, according to Kłapa.
Experts see good prospects for the development of the Polish QSR sector. „Poles can afford to eat outside their home more often but not to dine at expensive restaurants,” BZ WBK‘s Kaczmarek said. McDonald‘s Kłapa also hopes that growing household incomes will benefit the dining industry most. „People tend to spend the extra money on basic needs, such as food,” says Kłapa.
But with Poles getting richer, the question remains as to whether the classic fast-food chains will suffer as customers become more willing to dine at traditional restaurants. „I think these two segments can develop simultaneously,” Kaczmarek claims. „In the casual dining restaurants, one has to wait longer - they are not ’grab and go‘ diners � Although they are relatively affordable, one still has to pay more than they would for classic fast-food,” he adds.
Prepare the feast
Amrest is not worried about clients moving from fast food to casual dining as it can count on the likes of Pizza Hut or Rodeo Drive to supplement its KFC and Burger King restaurants. „We want to be present in all these segments,” Amrest‘s Piotrowski declares.
McDonald‘s Kłapa also doesn‘t fret about clients leaving his chain. He claims that choosing a diner is not only a matter of wallet size, but also one of lifestyle and pace of life. As for the casual restaurants, „Sphinx has its own customers and we have our own,” Kłapa said. „I believe that clients will circulate among the various restaurants - a kebab one night, a Big Mac the next and then a pizza another,” he concludes.
Burger King‘s return to the Polish market is shrouded in mystery. While it‘s been confirmed that the chain‘s first location will be in the recently opened Złote Tarasy shopping complex in Warsaw, the exact date is still being kept secret.
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