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Burgers a secret weapon in restaurants wars

In the fierce battle to attract diners, restaurants like Applebee's and Chili's have a new weapon that's proving successful: the burger.

Long a mainstay in American cuisine, the burger has gained a new distinction. It has helped to fuel the first increase in lunch visits at casual dining chains in five years.

Applebee's all-day brunch burger with bacon, onions, a fried egg, hash browns, American cheese and ketchup piled high on a bun.
Source: Applebee's
Applebee's all-day brunch burger with bacon, onions, a fried egg, hash browns, American cheese and ketchup piled high on a bun.

"I think they've stopped the bleeding a little bit," said Bonnie Riggs, a restaurant industry analyst at market research firm The NPD Group, about casual dining.

Casual restaurants saw a 2 percent rise in lunch visits for the year ended in June, compared to a 1 percent increase in visits at fast food restaurants, according to The NPD Group/CREST data. Overall casual dining visits are now flat after years of declines.

Burgers were a key part of casual dining's growth at lunch.

The number of burgers ordered at casual dining spots rose 3 percent during this time. While this still represents tepid growth, it was the only menu category to grow for the sector.

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Meanwhile, burger servings at fast food restaurants were flat during the same period, in large part due to the overall weakness of the fast food burger restaurant category.

Its largest player, McDonald's, has struggled to keep customers coming back. The flat burger servings in fast food come as traditional chains double down their focus on both chicken and pork items—like McDonald's artisan grilled chicken and Wendy's pulled pork offerings.

As fast food shifts its focus to breakfast, too, some casual dining players are putting a laser focus on midday dining.

At Outback, lunch is a central part of the Bloomin' Brands' unit's strategy with items like the double burger. Earlier this month, its CEO Elizabeth Smith said the company is "delighted with the performance" at lunch, which launched nationwide this year.

Fellow casual dining chain Buffalo Wild Wings launched a system-wide lunch program called "B-Dubs Fast Break" in April and CEO Sally Smith told analysts last month it is performing well.

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Fresh from casual dining chains' test kitchens are burger varieties that are both more indulgent and innovative. Dine Equity's Applebee's unit is a prime example with its all-day brunch burger: bacon, onions, a fried egg, hash browns, American cheese and ketchup piled high on a bun. Another version comes topped with barbeque brisket, jalapenos, cheddar cheese and onions.

Introduced last year, Chili's sweet and smoky burger is similarly over the top with pepper jack cheese, bacon, panko onion rings, lettuce, tomato, mango-infused BBQ sauce & Chili's signature sauce.

It might seem counter-intuitive for casual dining restaurants to highlight burgers as beef prices remain elevated, but Riggs attributed burgers' strength in casual dining in part to customers choosing less expensive beef entrees.

"Yes, we have high beef costs," she said. "What people are doing is they're trading down on the menu. When they go to full-service restaurant, instead of having a steak, they're having a burger."