Fast Food Joints Sonic and BK to Sell Booze

by Cynthia Wilson | July 7, 2011 9:32 am

Fast Food Joints Sonic and BK to Sell Booze

Is what’s good for casual dining, good for fast food chains?  Sonic Corp. (NASDAQ: SONC)[1] and privately-held Burger King seem to think so.  Both have decided it will add alcoholic beverages[2] to the menu in select locations.

Take note, McDonald’s (NYSE:MCD[3]). Burger King now has “Whopper Bars” in Miami, Las Vegas, and Kansas City to sell beer along with their burgers.  And Sonic says it plans to sell alcohol at two new specially designed South Florida locations: one in Ft. Lauderdale and the other in Miami, where customers who eat on the patios will have their choice three types of draft beers, 25 kinds of bottled beer and 10 varieties of wine.

Burger King and Sonic aren’t the first fast food chains to offer alcohol on their menus in America.  Starbucks Corp. (NASDAQ: SBUX[4]) sells beer and wine[5] at some locations in Seattle and Portland, Ore.

The jury is still out on how Starbuck’s alcohol experiment will fare. But Starbucks has one thing going for it that Burger King doesn’t – prices that more consistently attract a more mature and responsible  clientele. Though that could change if Starbucks alcoholic beverages attract a customer base it would rather not have.   Starbucks also has something else most Sonic restaurants don’t in indoor seating. Drinking beer in your car is a no-no, and that limits the sales potential there without major capital investment on Sonic’s part.

Nonetheless, Burger King and Sonic see alcohol as a way to compete with casual dining restaurants and drive evening business.

If you ask me, the fast food chains run the risk of driving some of their regular business out the door. Sure, both Burger King and Sonic say they plan to only sell alcohol in select locations and only to sit down customers. But what’s to stop a walk-in customer from ordering a beer to go for themselves or a minor?  And if either chain finds any meaningful success in alcohol sales, how long before they push to expand the concept into other markets, giving young adults and teens unintended access to alcohol, which would hurt the brands’ reputation with parents. McDonald’s has made a big name for itself with its Playplace indoor playgrounds and Happy Meal offerings.

I guess only time will tell if the rush to sell alcohol to folks looking for a quick meal will pay off as expected, or if it will just be a case of short term gain, long term loss for those who dare try it.

Endnotes:
  1. SONC): http://studio-5.financialcontent.com/investplace/quote?Symbol=SONC)
  2. add alcoholic beverages: http://www.thirdage.com/news/burger-king-sonic-add-alcohol-to-menus_07-03-2011
  3. MCD: http://studio-5.financialcontent.com/investplace/quote?Symbol=MCD
  4. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  5. sells beer and wine: http://investorplace.com/45456/starbucks-sbux-nasdaq-alcohol-mcd-cmg-dri/

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