CKE: Feb. sales fall amid deep discounting

CARPINTERIA Calif. CKE Restaurants Inc., the parent to Carl’s Jr. and Hardee’s, said same-store sales for the four weeks ended Feb. 23 fell 0.6 percent, including a 3.6-percent slide at Carl’s Jr., which it blamed on reduced traffic amid competitor price slashing.

CKE said it would not alter its tactics and that its two chains would continue to focus on higher-quality, premium products with a higher price point.

“We believe our competitors will be unable to maintain this level of discounting long term as it has already severely impacted the margins at a number of brands,” said CKE president Andrew F. Puzder. “In any event, on a pricing basis, we have no intention of trying to compete with free because, no matter what anyone says, you can’t ‘make that up on volume.’”

The restaurant industry has seen a rash of discounted deals and free giveaways at chains as varied as Denny’s and Caribou Coffee. Within quick-service, the largest brands like McDonald’s, as well as regional players like Sonic, have leaned on value menus to attract consumers. The moves are made to spark guest traffic, which has fallen amid this economic recession.

CKE said that during this economic crisis it would not stress price points alone but would promote the value of its premium products, which it said compete more with casual-dining fare than quick-service offerings. The company said that strategy would distinguish the brands from other quick-service chains.

Carl’s Jr. same-store sales also were hurt by rainy weather in its core market of Los Angeles, the company said.

At Hardee’s, February same-store sales rose 3.2 percent. The company did not discuss the success of Hardee’s, but said the chain promoted its Chicken Parmesan sandwich, as well as its Little Thickburgers, which are smaller, lower-priced versions of the signature Thickburger, during the month.

CKE operates, franchises or licenses 1,185 Carl’s Jr. restaurants and 1,912 Hardee’s restaurants.

Contact Sarah E. Lockyer at [email protected] [3].