We welcome in Josh Cobbs at the CEO of Restaurant Brands International, to talk a little bit about what's going on under the hood. And you look across the brands here and there are some very striking moments here, for example, with Burger King coming in less than expected at same
source sales comps. What do you think here, Josh, this really means is this a matter of price pressures that consumers are still feeling, or is this a matter of some change in consumer preference that's layered on top of this as well?
Hi Sinelli, Matt, thanks so much for having me. Good morning, and it's a pleasure to be on the show. So we are seeing some softness in the consumer, especially in some of our home markets, and you see that play through in some of the data across the industry. That said, we're really focused on having amazing value offerings for our guests in each of the businesses, and I think we're doing a pretty good job at that. At Burger Think King.
For the quarter, we had some incredible value offerings. We had our five dollars year away meal, and we did manage to outperform some of the largest players and the sector. So I think we've got the right value for the customer, and clearly they're looking for it. We're seeing a great response to what we have out there, and one of the things that we just shared this morning is we're going to extend some of those value offerings, specifically our five.
Dollars year away meal now into October.
So we have the right value offerings, we think they're working for the consumer, and we're going to keep those going through later in the year.
But the key here, Josh, is that the consumer needs cheaper products. Right. I've seen five dollars value offerings pop up at a number of competing chains. Is this consumer really under pressure? Can you see that in your sales?
So I think what the consumer wants is they want all the basics of the industry. They want the quality products, great service, and convenient modern locations.
Add a good value.
And what we always have to keep our eyes on is doing all those things together. So we're focusing on having the fundamentals right and in this environment, making sure that we have the right value offerings, and we are seeing a reaction to those value offerings. So some of the things we've had out there, like the five dollars walk Virginior duos or our five dollars year wave meal.
They're getting a lot of traction for caper customers. So we do see that guests are looking for things that they can do to get great.
Value out of our sector.
They're reacting to what we have out there, and we feel like we have the right offerings out there for that right.
I understand you know that you are doing a good job of giving the consumer what he or he wants. But what I'm asking you is, from your vantage point as the CEO of these brands that are so widely accessed by the consumer, how does the consumer's financial health look to you?
So we do see some pressure on the consumers. On consumers overall financials, I think there are some things that are putting pressure. So there are some things that are going up in their budget, things like rents or insurance payments are putting some pressure and that's causing consumers to be more choiceful. And so how we see that is we see consumers are choosing some of those value offerings and in some cases they're attaching less sides. So those
are the behaviors that we see. We think that environment is likely to continue through the rest of the year and across each of our businesses, we're trying to make sure that we have the right value offerings that cater to the customer in that environmentetitive.
How competitive is it out there now, particularly in this kind of value sector of food right now? If you think about it, five dollars seems to be the sticking point. You know, Taco Bell also had a five dollars deal as well. Wendy's had a three dollar breakfast deal. When you think about this five dollars BurgerKing deal that you now are extending as you announced this morning, how important is that price point right now and how competitive is it among other brands.
So I do think that five dollars price point is relevant to the consumers, and we see that in the reaction that we're getting to it. And now you're seeing more of our competitors bring that price point as well. In fact, we've had great offerings at the five dollar price point for a long time.
Now you've seen more of our competitors getting into the game.
Some of the other big competitors launched five dollars meals recently. What's really interesting that we're seeing is that we think that might actually be helpful to the sector overall as you have more players bringing great value back to the consumers. I think as a sector overall, we're starting to improve the value impression of the restaurant sector with consumers.
And it's been really interesting.
Even as we've gone through the last month or two and you've seen more of our competitors start to bring into market and promote some of some more five dollars offerings, we actually haven't seen any impact to our business. So we've actually seen increasing adoption of those meals in our business doing pretty well with them. So I think there are some positive aspects of the amount of competition and the amount of value that the sectors bring to the guests, which they really seem to like you have.
A great vantage point.
Also to comment on the labor market, Josh, how do you see the labor market right now in terms of supply. We've seen the unemployment rate rise and economists are telling us that's because there are more people in the labor market at least that's part of the reason. Do you see that or do your franchise e see that as well?
So I would say we've seen labor market condistionions be a little bit warm benign today versus where we were two years ago, and when we were in the height of COVID, things were a little bit more challenging, and that's eased a bit. So we've had more interest in jobs in our sector, so that's made life a little bit easier for our franchise ease. It's allowing us to staff the restaurants better and to provide better service to our guests, and I think those are all things that help us a lot.
And that's mostly in the US.
Up in Canada, there has been a little bit more pressure on unemployment, so the unemployment rates ticked up in a little bit bigger way up up here in Canada. But our business up here has been doing great. I'm here in Toronto today in our Tim Horton's test kitchen, and we just reported almost five percent same store sales in our Tim Wharton's business, which is tremendous even in a challenging environment.
So Canada's a little bit different.
But in the US, less change and unemployment recently, Josh.
You know, my colleague here, Matt Miller, really wants to start using wagabi or ozambag and he talks about it daily. Actually, these days. You know, when you look at these weight loss drugs that are entering the market at more and more scale, how do you think that's going to impact your brands moving forward?
Yeah, we haven't seen any impact so far. I know there's been a lot of talk about it in the press and the investor world, but we really haven't seen any impact from any.
Of the weight lift laws drugs so far.
I'd say we're much more focused on getting the basics right and bringing the right value to our customers, even in terms of the offerings.
Because we had a great big take story today on you know, the weight loss drug use in Bowling Green, and one of the protagonists in the story was saying, I just want more chicken because you need to get more protein. Right. So do you not see people choosing the higher protein items on your menu as a result of using these drugs.
I think just because of where the adoption rates are, and I think there's still low in the overall population so far, we don't see it playing out in our aggregate data in the way that we.
Can see yet.
All Right, Josh, thanks so much for joining us. Josh cobbsa there of Restaurant Brands International,