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In the NewsBetter burger credited for upswing at A&WBurger chain's sales strong as it changes product and lures owners of classic carsBruce Constantineau, Vancouver Sun Friday, February 08, 2008 Hotter buns and juicier beef patties propelled A&W restaurants to more than $638.8 million in Canadian sales last year. That's a 6.7-per-cent increase over 2006 sales and the burger chain's same-store sales grew by 3.7 per cent in 2007. A&W Food Services of Canada president Paul Hollands said new bun-toasting equipment and a "secret" process for making juicier, tastier beef patties helped A&W produce better burgers for its customers. He said the changes were needed to satisfy the burger chain's target baby-boomer market, which demands a constantly improving, great-tasting product. "We're absolutely committed to having the best-tasting hamburgers in Canada," Hollands said in an interview. He said the new beef-patty process is "proprietary" information and would only acknowledge A&W did some "really interesting work" with its beef supplier in 2007. A&W Revenue Royalties Income Fund has reported a 2007 net profit of $10.6 million from sales at 660 Canadian restaurants, compared with an $11-million profit a year earlier from 654 restaurants. Hollands noted Canadian food service sales rose by just 3.2 per cent last year, compared with 5.5 per cent in 2006, so the market clearly slowed down. He cited a drop in tourism caused by the high Canadian dollar and regional economic slowdowns as major factors behind the slowing sales. Hollands said A&W is well prepared to do whatever is needed to promote sales this year if the Canadian economy slows down even more. "You have to respond tactically to whatever the market gives you," he said. "If it's a tougher economy, you're going to see more price-sensitive consumers so you have to respond to that [with price promotions to boost sales]." Hollands said the Prairie provinces remain the strongest in Canada for A&W sales, followed by B.C., Ontario and pockets of Atlantic Canada. He said New Brunswick, with about 16 A&W outlets, has the weakest market in the country. "We thought B.C. suffered from the downturn in softwood lumber but New Brunswick is really suffering from softwood lumber and fishing and tourism,"he said. Hollands said A&W will expand its "Cruise at the Dub" program this year -- a summer promotion that invites classic car owners to A&W parking lots on certain evenings. The restaurant provides music and some even use carhops to serve customers at the popular events, which attracted about 750,000 people last year. Hollands said a Maple Ridge event last year drew about 200 classic cars, while one in Halifax attracted at least 1,100. "We've helped the event along but it has taken on a life of its own," he said. A&W Revenue Royalties Income Fund units, which have traded between $12.80 and $14.91 in the past year, gained 21 cents Thursday to close at $13.86 on the Toronto stock exchange. |
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