The Burger Bubble

Modern lessons from that essential American craving

"The once-humble hamburger has gotten too fancy for its own good." writes the Wall Street Journal's Julie Jargon, who pithily sums up the dilemma:

As the number of outlets serving “better” burgers— featuring nontraditional toppings and artisan buns—skyrocketed over the past decade, so has the average burger tab, turning some customers off.

Brian Cockerline, a 20-year-old Rutgers University student, used to go to Five Guys for a burger once a week in South Plainfield, N.J. With fries and a drink, his tab was around $13. Now, he is cooking burgers at home instead.

“I like Five Guys but I can buy ground beef and one onion and get pretty close to the same burger for half the cost,” says Mr. Cockerline, who rarely goes to Five Guys anymore. “A hamburger, to me, is not a luxury,” he said.

Mrs. Jargon goes on to note two eye-opening facts that belie the fulsome expansion of "better burgers" into almost every part of the country. Most importantly, lunch traffic to quick-serve hamburger restaurants dropped by 5% last year. That steep decline is the largest year-over-year decline that market-research firm NPD Group Inc. has ever recorded.

“It’s not sustainable for them to expect people to show up and spend $13 on a burger on a consistent basis,” said Kurt Kane, chief concept and marketing officer at Wendy’s Co. That would seem sage analysis indeed: Mr. Cockerline now mostly goes to Wendy’s when he is too busy to cook—because he can’t make a meal any cheaper than $4, he said.

A second fact underlines the simple economics: Wendy's own internal analysis show that, on average, people only have $4 to $6 to spend on lunch each day.

Read more of Julie Jargon's excellent article…