Who would have thought that reducing the caloric content of fries would produce some “fat” returns? By merely offering 40% less fat and 30% less calories than McDonald’s classic french fries, Miami-based Burger King’s shares have increased by 18% in 2013 alone. Burger King plans on “fattening” the margins further by selling the new “skinny” fries, deemed “Gratifries” in Canada, by selling them at thirty cents greater than the regular fries offered. While the business strategy behind the introduction of “Gratifries” may seem eccentric on the surface, it turns out that such a strategy is not that surprising, after all. Due to the healthy eating movement that has been encompassing society the past few years, offering a relatively “healthier” alternative to the infamous “cheat day” food has sparked demand for the usually stagnant fries market. In addition, a fast-food chain would simply want to sell more fries due to the paramount principle of firms: profit maximization. Fries are, in essence, an enormously lucrative commodity. It has been reported that “out of every $1.50 spent on a large order of fries at a fast food restaurant, perhaps 2 cents goes to the farmer that grows the potatoes.” So what is the bottom line to this story? For consumers, it is advised that next time they have a “hankering for fries and want to save a few calories, give Burger King Gratifries a shot.” For producers, it is imperative to recognize that not all fat things (ahem, wallets) equal fat pay checks.
The article can be read at: http://www.bnn.ca/News/2013/10/4/Burger-King-tries-to-fatten-margins-with-skinny-fries.aspx