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BK focuses abroad for expansion, beverage push

MIAMI About 80 percent of Burger King’s expansion during the next five years will come from opening units internationally, where it will also step up its beverage sales effort, officials of Burger King Holdings Inc. told financial analysts here Wednesday.

They also reportedly detailed plans for a flurry of domestic new products, including two variations on the Whopper, a line of smoothies, drinks that combine specialty coffees with shake mixes, three new iced coffees and a kids’ meal featuring macaroni and cheese.

Executives also revealed that the chain will open more stores in the United States during fiscal 2008 than it closes, marking the first increase in BK’s domestic unit count in six years.

All told, the executives said, BK will add about 300 restaurants during the fiscal year ending in June. Its unit tally will increase by 3 percent to 4 percent annually in subsequent years, they indicated. The chain, based here, currently consists of 11,395 units in 69 countries, including 7,500 in the United States and Canada.

Burger King Holdings said it has developed a detailed global development plan to accelerate its worldwide growth over the next five years, in both new and “profitable” current markets.

The overseas emphasis also apparently extends to the marketing of some products. President of global marketing Russ Klein reportedly told analysts that BK will intensify its efforts to sell beverages in Europe and Asia, though the company recognizes the competitive challenge that archrival McDonald’s poses domestically. That “big bet” is “daunting to me,” Klein was quoted as saying.

Other products he reportedly previewed include an Angry Bacon and Cheese Whopper, featuring bacon and pepperjack cheese, and the Indy Whopper, which will be promoted via tie-ins with the new Indiana Jones movie that hits theaters this summer.

Officials also repeated earlier disclosed plans to add wraps and apple slices cut and presented like French fries.

About 90 percent of BK units are franchised. That model will remain the same in the international arena, though some markets may be entirely franchised, the company said at the analyst conference.

Burger King Holdings has been bucking the negative trends experienced by many of its competitors, last month reporting a 29-percent year-to-year increase in its second-quarter profit on revenues that jumped 10 percent to $613 million.

The company also posted a global same-store sales gain of 4.5 percent and a domestic same-unit sales jump of 4.2 percent for the December-ended quarter, the same week that quick-service segment leader McDonald’s posted flat domestic same-store sales for December and a 3.3-percent increase for the quarter.

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