Wednesday, December 27, 2006

Some jousting within the King's court

Looks as if the King has discovered a joker within his ranks. The House of Whopper had to do some fast damage control after a European executive told a London newspaper that Burger King’s halt on advertising to kids in Great Britain would cut sales there “without doubt by approximately 10 to 15 percent." That translates into a loss of about $196 million, according to the Daily Telegraph story.

“It will have a major impact on our top line," Giorgio Minardi, vice president of Burger King’s northwest-Europe operations, explained to the paper. It noted that Minardi’s comments came in the first interview he’s granted since moving to BK from arch-rival McDonald’s earlier this year.

And he pretty much flubbed it, BK’s home office in Miami suggested a few hours later with a terse statement. Without mentioning Minardi or his prediction, the media release said the discontinuation of ads aimed at children would have “minimal impact.” Or at least on Burger King. The situation for Minardi’s former employer is a far different thing, suggested BK European president Peter Robinson.

"Our target consumer for many years has been 18 to 34 years old,” Robinson said in the statement. “We expect the advertising ban to have a far greater impact on our competitors who have previously targeted children as a core consumer."

Of course, those competitors won’t find out for several weeks after BK is gauging the actual impact of the halt in kids ads. The official “junk food” ban will be phased into effect starting at the end of January. But BK pledged in the fall to halt its commercials before Christmas, as indeed it did last week, in the midst of the busy holiday shopping season.

There’s been no response yet from Minardi about being contradicted by headquarters. Come to think of it, there’s been no word from him at all since his maiden interview. Why do I think it’ll be a long time until we hear from him again?

It’s a shame, too, because it’s nice to witness some actual candor in this age of media training, spin-doctoring and professional muzzlers.

1 comment:

  1. I'm not sure if was candor or just knuckleheadedness/bad math, but when I heard the 15% figure on NPR yesterday morning, my first thought was that they're sandbagging--no way does BK do 15% of its business with kids/kid-influenced, though McDonald's might. And even then, the impact will not be to lose 100% of any kids-generated business, but some fractional amount of that because the kiddies won't know that BK now has the latest in plastic-molded schlock. My assumption was that they were overplaying the impact for media effect, but that's a bad strategy since the investment community listens to news too. They took a minor beating in the morning, but recovered in the afternoon and are up net for the week today.