Wednesday, May 11, 2011

KFC Doubles up on Double Down record one day sales

Punters waiting to "Double Down" at KFC Quay Street Yesterday

The introduction of the KFC Double Down Sandwich yesterday in New Zealand just has to be the marketing and business coup of the last 10 years for the company that holds the franchise for KFC in this country, Restaurant Brands Ltd [RBD.NZX].

Health nazis across the land yelled from the rooftops to any left leaning publisher or media harlot in the country that would listen and as a result of the free publicity you couldn't go anywhere over the last few days without anyone mentioning it in a conversation, hearing in on talkback or seeing it posted on facebook or twitter.

Restaurant Brands didn't have to lift a finger or spend a cent on publicity, it was all done by the old fashioned word of mouth but done at the speed of the internet rather than as quick as you could tell or phone your neighbour.

There has been little paid advertising of this sandwich at all!

This has led though to record one day sales for KFC and long lines of people waiting in drive thrus and at the counters of every KFC across the nation. Not only did they sell the sandwiches, customers also bought other items on the menu to boot and the increased sales are set to continue as the company has carefully created a scarcity factor into the sale of this product - it will only be available for 5 weeks, so get in fast!! Of course it will be re-introduced on a semi regular basis because who wouldn't want to as every time it comes back on the menu the fingers will wag and the media will go back into overdrive.

Long term, these promotions and hub bub around such "controversial" subjects as so-called junk food will help sales of other products more than the actual promotional item itself.

The next 5 weeks of sales for the company will be interesting to watch. They will not continue in the same volume as today's huge rush to buy the Double Down but they are likely to be significantly higher than comparable sales last year. At $7.90 per unit compared to their burgers with buns the margin for this product is significantly higher and high margins in this business are hard to come by.

This has been a big win for KFC and its marketing program and a great way to create excitement for a new product with big spin offs for other parts of their business.

RBD investors should be lick'n their lips in anticipation of the higher sales.

KFC 1 , Food police 0.

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