Tim Hortons deal is hurting Burger King's image(Read article summary)
Burger King’s proposed $11 billion acquisition of Tim Hortons was widely characterized as a canny tax-saving maneuver as soon as it was announced. But what Burger King might gain monetarily might not balance the ill will the merger has generated with customers who see the burger chain’s action as unpatriotic.
Sean Kilpatrick/The CanadianPress/AP/FIle
The home of the Angry Whopper is the focus of angry consumers. Burger King Corp.’s proposed $11 billion acquisition of Canadian chain Tim Hortons was widely characterized as a canny tax-saving maneuver as soon as it was announced. The combined entity’s headquarters would be in Canada where corporate tax rates are lower. But what Burger King might gain monetarily might not balance the ill will the merger has generated with customers who see the burger chain’s action as unpatriotic.
Burger King is feeling a different kind of whiplash than it did two years ago when it launched the Whiplash Whopper in Canada.
According to the YouGov BrandIndex daily brand consumer perception research, Burger King’s consumer perception levels have dropped to its lowest in four-and-a-half years. The 30,000 respondents polled were asked, “If you’ve heard anything about Burger King in the last two weeks, through advertising, news or word of mouth, was it positive or negative?” Burger King’s Buzz score plummeted from a +13 on Aug. 20, 2014, to a -1 today. A score can range from 100 to -100 with a zero score equaling neutral, so Burger King’s Buzz is slightly more negative overall than positive.
It’s worth noting that Burger King’s -1 score ties it with McDonald’s Corp., which has been pummeled with reports about its wages in the U.S., the quality of its meat in China and the cleanliness of its stores in Russia.
Burger King’s Facebook page has been filled with negative comments such as this from David Villarreal: “You greedy, seditious, traitors! I was a lifelong BK customer and I will NEVER support your businesses again! You should loose the right to conduct business in the country that made you such a successful resturaunt [sic]. Enjoy Canada you greedy Traitors!”
Burger King has responded on Facebook that the chain’s headquarters will remain in Miami (however, the holding company will be based in Canada, which will yield some tax savings). On its page, the chain wrote, “We hear you. We’re not moving, we’re just growing and finding ways to serve you better.
“As part of the announcement made today, both Burger King Corp. and Tim Hortons will continue to operate as independent brands. We’ll just be under common ownership. Our headquarters will remain in Miami where we were founded more than 60 years ago and business will continue as usual at our restaurants around the world.
“The decision to create a new global QSR leader with Tim Hortons is not tax-driven – it’s about global growth for both brands. BKC will continue to pay all of our federal, state and local U.S. taxes.
“We’re proud of the heritage of Burger King and will maintain our long-standing commitment to our employees, franchisees and the local communities we serve.
“The WHOPPER isn’t going anywhere.”
Burger King Corp. should be reporting Q3 sales at the end of October. That will be the real measure of consumer anger over the proposed business combination.