GO
Loading...

Bun Fight: US Burger Chains Do Battle in London

Thursday, 4 Jul 2013 | 8:16 AM ET
A Shake Shack cheeseburger with a portion of fries outside the company's new burger restaurant in London
Simon Dawson | Bloomberg | Getty Images
A Shake Shack cheeseburger with a portion of fries outside the company's new burger restaurant in London

London—often the laughing stock of American food connoisseurs— is set to become a haven for U.S. burger lovers as two of the country's most popular chains open stores in the U.K. capital.

Five Guys, a fast-growing upmarket burger chain, opened the doors to its first outlet outside North America in London's Covent Garden on Thursday to coincide with Independence Day. By Thursday evening there was a three-hour wait for a table at the restaurant.

Hot on its heels, rival Shake Shack will open its first location in London just 300 meters away on Friday.

(Read More: Plan to Pay More for Your Independence Day Barbecue)

London is an obvious choice for both restaurants. In the past few years, the city has witnessed a growth in high-end burger eateries, with chains like Honest Burger and Byron opening a number of stores. The British have taken such a liking to high-end burgers that they commonly refer to them as "posh burgers".

The Choice of Country Leaders

In fact, the British finance minister George Osborne sparked a wave of media coverage recently when he tweeted a photo of himself enjoying a late-night burger and fries in his office, ahead of June's government spending review.

He was heavily criticized when it was revealed that the burger he was eating while finalizing cuts to benefits and government spending wasn't the typical fast food fare from Burger King or McDonald's, but a high-end burger from Byron, which costs £6.75 ($10.30). A quarter pounder with cheese at McDonald's, by comparison, costs £2.59 ($3.95).

Defending his gourmet choice on TV, Osborne said: "Well McDonald's doesn't deliver, I was working late in the office." He added that he was "partial to a quarter-pounder with cheese".

(Read More: McDonald's, a Golden-Arches Double Top?)

Like Osborne, U.S. President Barack Obama enjoys an upmarket burger and can recommend Five Guys to the Chancellor. Back in 2009, the U.S. President was spotted in a local Five Guys in Washington, D.C., where he ordered a cheeseburger with lettuce, tomato, jalapeno peppers and mustard.

George Osborne putting final touches to a speech with the help of a Byron burger
George Osborne | Twitter
George Osborne putting final touches to a speech with the help of a Byron burger

Bun Fight in London?

Speaking to CNBC, Shake Shack founder Danny Meyer downplayed talk of a "burger war".

"The right assumption is that there is no war whatsoever," he said. "We're a country that has such a long tradition of people loving burgers, when it comes right down to it, it's a piece of meat between two pieces of a bun, and really the joy is how did you cook, how did you source the meat. And how much fun are you having while you eat it."

He added: "There's room for a lot more than one burger."

Shake Shack opened its first restaurant in New York City's Madison Square Park in 2004, and quickly become popular for its all-natural burgers, as well as its hot dogs and frozen custard.

(Read More: Hold the Pickles: Woman Says Razor in Her Burger)

It has now expanded across New York, and has opened up stores in Connecticut, Florida, Washington D.C., Massachusetts and Pennsylvania. London is not its first non-U.S. opening - it also has restaurants in Turkey and the Middle East.

The chain is part of Danny Meyer's Union Square Hospitality Group (USHG) which also operates New York City restaurants like Union Square Café, Gramercy Tavern and Jazz Standard.

Meyer said a successful London launch could lead to more in the capital.

Shake Shack Opens First London Restaurant
Danny Meyer, CEO of Union Square Hospitality, discusses Shake Shack's first restaurant in London, and explains that their burger operations are "fine casual" and not fast food.

"If Londoners react to the burger the way we hope they will, we absolutely would love to have another one here in London," he said. "You are the city that feels as close to New Yorkers' hearts as any city in the world, so we really hope it's going to do a great job here."

Five Guys is the larger of the two chains, with over 1,000 locations in 47 U.S. states.

In 2012 Market Force Information, a customer intelligence solutions company, surveyed 7,600 U.S. burger-goers and found that Five Guys was the favorite burger chain in the country.

According to Five Guys, there are over 250,000 possible ways to order a burger at their restaurants.

(Read More: Reclaim Your Angus: CKE Chief Knocks McDonald's)

The UK Scene

Nick Andrews, who set up the "Burger Me London" blog in 2011, has witnessed the steady growth of U.K. burger restaurants and said that last year was a turning point.

"2012, for me, was London's Year of the Burger—when they really became mainstream," he said.

Andrews said the high-end burger market in London was now growing fast and there was plenty of room for new U.S. competitors.

"Local independents have helped us get excited about burgers, and in my view they have proved the burger market has legs," he explained. "That's why the American big boys are now sitting up and taking notice."

"While the food trendsetters have moved on, the burger category has been extended beyond it's original audience and so I think there's a huge nascent market for good quality comfort food that these places will start to tap into. If I was being unkind, I'd call them the burger 'laggards'."

Meyer agrees with Andrews premise, given what is happening to burger-eating habits in the U.S.

"We call this the 'fine-casual market'," he explained. "Basically what's happening is this: people eat that many burgers in fast food restaurants - $80 billion in the United States. The better-burger or fine-casual market is just starting to take a small bite out of that."

"If you can take a fine dining quality, a place like Gramercy Tavern, Union Square Café, and offer the same beef— our beef is coming from Scotland here—but the same quality beef we use in a fine-dining restaurant for a fraction more than fast food, I think he has really good taste."

By CNBC's Kiran Moodley: Follow him on Twitter @kirancmoodley

Correction: this story has been corrected to reflect that the Five Guys opening in Covent Garden in London is the first outlet outside North America.

Featured

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video