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​Opinion - Burger Boom or Bust?

​Opinion - Burger Boom or Bust?

Posted by Stelios on 21st May 2024

The enduring appeal and ever-growing financial influence of burgers in the UK's fast food landscape make for a compelling study of consumer trends and business strategy.

Honest Burgers, Brighton, UK Andy Li, CC0, via Wikimedia Commons

Initially introduced in the 1950s by American chains such as Wimpy and further expanded by giants like McDonald's, which landed in 1974, the burger phenomenon has only gained momentum. McDonald's, which now boasts over 1,450 outlets in the UK and Ireland and employs more than 135,000 people, reported typical turnovers of £2.0 million to £5.8 million per franchised restaurant in 2023. This speaks to the massive scale and profitability of burger sales.

Other market players, like Honest Burgers and Five Guys, illustrate the robust health of the burger sector through their aggressive growth and impressive turnovers. Honest Burgers' recent accounts show a 26% turnover increase to £48.3 million, primarily driven by increased customer transactions. Five Guys, having expanded from 14 outlets in 2014 to 160 in 2023, plans to double its presence again in the near future.

Key Facts:

  • McDonald's UK and Ireland - operates over 1,450 restaurants and employs more than 135,000 people. In 2023, it reported typical annual turnovers ranging from £2.0 million to £5.8 million per franchised restaurant.
  • Honest Burgers reported a 26% turnover increase in their latest accounts, and total turnover rose by £10.1 million to £48.3 million for the period ending 29 January 2023.
  • Wendy's - aims to open up to 400 restaurants in the UK.
  • Amigos Burgers and Shakes - currently has 20 locations in London, with eight more planned for Birmingham, and it plans to expand to 100 stores in the next five years.
  • Five Guys - Expanded from 14 outlets in 2014 to 160 in 2023 and aims to increase its outlets to 300 in the next few years.

Five Guys Burgers and Fries (7025300923) Jerry Huddleston from Hampton, Minnesota, US, CC BY 2.0, via Wikimedia Commons

Wendy's, creating over 400 jobs as part of its UK expansion, further highlights the burger market's resilience and expansion. This marks its return after a 20-year hiatus. Meanwhile, the halal burger market is also flourishing, with Amigos Burgers and Shakes planning to open 100 stores in the next five years, emphasising the diversity within the burger sector itself.

However, not all burger stories are of unqualified success. Byron Burger, once a significant player with 67 outlets, faced financial struggles, reducing to just 12 branches by January 2023. This demonstrates the competitive pressure within the sector and the critical importance of maintaining operational and financial health.

Interestingly, despite the burger's ubiquity, it is not among the top four in Just Eat's sales statistics, suggesting potential room for growth. This discrepancy could indicate a gap in the delivery market or possibly a saturation in dining-out options that haven't fully transitioned to the home delivery segment.

A Dave's double at Wendy's in Stratford (51657183734) Daniel from Glasgow, United Kingdom, CC BY 2.0, via Wikimedia Commons

Economic indicators point to burgers not just holding their own but encroaching on the sales of other fast food, like pizza. The sector saw a 17% rise in transaction volume and a 12% increase in customer spending over the last year. Such growth indicates a shift in consumer preferences towards burgers, now a fixture across a spectrum of dining experiences, from fast food to high-end restaurants.

In conclusion, the burger's ascent in the UK is a testament to its adaptability and enduring appeal. With evolving consumer expectations and substantial financial backing, the burger market is well-positioned for continued growth. However, this implies that businesses must consistently deliver quality products to maintain and expand their market share in an increasingly competitive environment.