Burger King says beef costs have plunged

Burger King says beef costs have plunged
By Janie Gabbett on 2/27/2009

Burger King Holdings said its beef costs have plunged nearly 25 percent
so far this year as weaker global demand and increased supplies have
pushed prices lower, according to Dow Jones.

Burger King is now paying $46 per case of beef, down from $61 a
case at the beginning of 2009, Chief Financial Officer Ben Wells said
at the company’s investor and analyst conference.

In 2008, Burger King
paid about $45 per case. Beef makes up 19 percent of food costs for the
chain, Dow Jones reported.

The price decline is driven by falling global meat demand, as well
as increased domestic dairy cow slaughter in reaction to falling dairy
prices, according to Wells.

He also said Burger King has locked in its 2009 chicken contracts
at prices that were below the 7 percent to 8 percent increase over last
year that some had anticipated.

Wells also reiterated the company’s estimate for growth in
same-store sales of between 3 percent and 4 percent for the year,
according to the Associated Press. He added that the chain’s net restaurant count will rise by 350 to 400 units.

Burger King now operates 11,757 restaurants, compared to McDonald’s 32,000 units worldwide.