Fast-moving chain king of Irish burgers

Burger King's Irish operation has not experienced the slump that has hit sales in the US and parts of Europe, according to a spokesperson from Burger King's UK head office.

Diageo, the giant food and drinks group which owns Burger King, recently announced that the fast food chain's operating profits fell by £25 million sterling to £177 million as a result of the foot-and-mouth crisis, BSE, problems in Germany and a fall in consumer spending in North America.

European sales fell by 9 per cent, while those in the US dipped by 4 per cent for the year to June 30th. However, despite all this, the Irish business is experiencing "year-on-year growth", the spokesperson said.

When contacted by The Irish Times, Burger King's Irish franchise holders, the OKR Group, run by father and son team Pa and Ger O'Leary, said they "do not talk to the media".

They obviously made an exception back in 1999, when they announced a £7 million (€8.88 million) investment in the business, with a target of 50 restaurants by 2005.

The hamburger chain opened its first outlet on Grafton Street 20 years ago. It now has 22 outlets and two drive-thrus.

If the aggressive expansion tactics of the main fast food players is anything to go by, it appears that the Irish consumer has not been unduly influenced by recent scares.

"I haven't seen any fall-off in the demand for sites," says Fintan Tierney of Lambert Smith Hampton. Kevin Maguire of Hamilton Osborne King agrees that the top chains "are all still actively seeking sites".

Landlords view fast food outlets as desirable tenants, says Maguire, because they are more flexible in terms of their space requirements.

"Most retailers do not value the upper floors of a premises because they don't use them, but burger outlets use the ground and upper floors and can adapt their business to odd-shaped buildings."

Of the two top burger chains, McDonalds and Burger King, the former is regarded as a more coveted tenant. "From a covenant point of view, McDonalds is financially stronger and appeals more to kids," said one agent.

Other rivals include Supermacs, KFC, Eddie Rockets and Abrakebabra.

An industry source commented that Burger King "has got its act together in recent years", since Grand Metropolitan and Guinness merged in 1998 to create Diageo Plc.

"They seem to have found good franchisees in the O'Learys, who appear to run a good operation. The quality seems to be getting better. They are giving McDonalds a good run for their money.

"The only alternative to these burger bars are niche operators like Nude, but it appears that it would take some radical change before the Irish go off fast food. Until then it looks like burgers all the way."

A spokesperson for McDonalds, which has 62 stores in the Republic, said "profits are up on this time last year".