Gibbons: forge ahead by mastering the basics

Nation's Restaurant News, Oct 22, 1990 by Peter Romeo

Gibbons: Forge ahead by mastering the basics

In his first major address to Burger King outsiders since assuming the chain's helm two years ago, chief executive Barry Gibbons offered an often humorous assessment of what is needed to succeed in the face of foodservice's "new realities."

"Am I going to tell you my strategy?" he rhetorically asked the MUFSO audience of more than 1,000 operators and suppliers. "The hell I am! That's assuming I have one!"

Yet amid the jokes and anecdotes, he indicated that Burger King will contend with "the head winds springing up for the 1990s" by focusing on the basics of providing a pleasant dining experience for a reasonable price. He advised MUFSO attendees to follow the same approach.

"Somewhere from 100 to 150 million Americans have an eating-out experience every day," he told his rapt audience. "I would say that one out of 10 - 10 percent - have an unpleasant experience. That's 10 to 15 million persons having an unpleasant dining experience every day!

"There's your growth opportunity," he continued as he paced the stage. "That's how you beat the competition of microwaves. Concentrate on it, concentrate on it, concentrate on it."

He also spoke of a "willingness to go upstream" as a means of controlling costs. In Burger King's instance, he said, "we look from steer to mouth."

"You've got to hook that together with a total commitment to quality, a fanaticism about quality," he said. "That's not just quality control. That's also your financial services department dealing with your operators as if they were customers."

He noted that the nation's slide into a recession will put "increasing pressure on margins." But many businesses are too fixated on "net contribution to net cost over a fixed period of time. Nothing else matters."

Panic about margins can drive operations into marketing trouble, he suggested.

"You get trapped in a great no-man's-land," he said. "You see a Rolls Royce restaurant with a sign outside saying, `Happy Hour.'" The real message, he suggested, is "we're desperate!"

"Finding and holding your position is going to be critical," he advised. "In our case it was international [operations]. We either had to do it or get out of it."

Most of his references to Burger King were acknowledgments of its problems rather than detailed descriptions of the chain's plans.

For instance, he noted how Burger King's British parent, Grand Metropolitan PLC, wielded a strategy called "yield management" in the operation of its retail facilities in Europe. In essence, he said, the philosophy called for drawing more sales out of existing customers.

"When was the last time you went to a Burger King and somebody tried to sell you something?" he asked.

He also joked about Burger King's sales performance in recent months.

"Me, I've got two consecutive hours of sales growth," he quipped.

"The reality is that head-to-head competition is as intense as it's ever been," he said. The chain and its competitors have to recognize the "new reality" that "supply and demand have fundamentally changed."

In addition, "for me and for others, there is indirect competition growing out there. It's not just convenience stores; it's also gas stations. [And] one of the new realities is a fierce non-direct competitor called the microwave."

Compounding the damage are "socioeconomic realities out there that we're going to increasingly deal with."

For instance, he said, there is no longer any doubt that the nation is sliding into a recession.

"I'm not hearing complaints about `if; I'm hearing complaints about how long," he said. "It could be three months; it could be three years."

Gibbons concluded his keynote address with some amusing predictions.

"I have had the unique opportunity to see the answers to the Trivial Pursuit game that will come out in the year 2000," he joked. "There will be a MUFSO section to it. I don't know what the questions will be, but here are some of the answers:

"One is `McTrump.'

"Another is `[Wendy's founder and spokesman] Dave Thomas got his Emmy nomination in 1999. He was beaten by Arnold Schwarzenegger for his performance as Othello.'

"And the third is "Burger King introduced Fish Tenders in December 1989.' The second part of that is, `They sold eight.'"