Burger battleground in Covent Garden

I took a walk around Covent Garden the other day. Blimey, there’s a place not short of a burger bar or ten. Within the piazza itself there is a newly refurbished Shake Shack and nearby you have MEATmarket, Honest Burgers, Byron and Gourmet Burger Kitchen, and not much further away there is Five Guys and McDonald’s. Furthermore, this line-up will soon be increased with the imminent opening of Wahlburgers’ first UK site on James Street. Stepping back slightly, this is a microcosm of the evolution of the burger market in the UK – and it is timely to review this development and consider prospects going forwards.

Let us start with Shake Shack. Six years after it opened this somewhat compromised UK debut site, it has had an attractive makeover, both internally and thankfully, externally too, with some heating and glass panelling introduced. The timing of this is upgrade will doubtless have been influenced by the forthcoming Wahlburgers, which alongside its roster of burgers, shakes and sides, will feature some on-site entertainment via assorted video screens and potentially benefit from some celebrity endorsement.

What you have here is what at MCA we describe as Wave 4 of the burger market evolution. But let’s not get too ahead of ourselves and go back to the beginning. Wave 1 commenced in the mid-1970s with the arrival of McDonald’s (1974 and in Woolwich for certain quiz enthusiasts) and of Burger King (1976 and Haymarket, London). Squarely addressing hugely important consumer needs around value, convenience and speed, both businesses have gone on to bigger and better things, with McDonald’s approaching 1,300 outlets and Burger King the best part of 550.

By contrast, Wave 4 is the youngest and least developed phase of market evolution. If Wave 1 was about the traditional US burger chains, Wave 4 features contemporary US operators. It has been led by Five Guys (2013 and Covent Garden), and as with Shake Shack and Smashburger, key points of differentiation from Wave 1 propositions include the availability of alcohol, higher quality products and a more premiumised pricing strategy. To illustrate the latter, prices on cheeseburgers range from 99p at the traditional giants up to £8.75 at Five Guys and Shake Shack (double) – certainly a by no means insignificant differential.

Sitting in the middle in terms of both timing and price positioning are Waves 2 and 3. Wave 2 comprises a more premiumised market evolution that was led by the ‘better burger’ brigade of Byron, Gourmet Burger Kitchen and Handmade Burger Co and commenced from the turn of the century. GBK is the sub-market leader here with over 70 sites, but sadly, and as with its peers, has not been immune to tightening market conditions and rising cost pressures that have dictated the need to close less profitable sites.

Wave 2 players have also been impacted by intensifying competitive pressures, in part arising from the emergence of more artisanal specialists that form Wave 3. The likes of Honest Burgers, Patty & Bun and Dirty Burger, while still relatively in total terms at c.100 sites, have served to redefine notions of the ‘best burger’, certainly among trendier, and influential, consumer segments. Artisanal players typically offer more pared back menus and focus strongly on quality, provenance and transparency. Indeed, a greater amount of product story-telling is likely to feature within the thinking of marketing teams across the breadth of the market. But what else?

At this point it is tempting to try to think about what Wave 5 might look like? One obvious answer is that it comprises plant-based specialists. Certainly, the consumer trends towards more vegan/vegetarian/flexitarian diets are gathering momentum and have already spawned a plethora of independent operators, as well as all the larger chains rushing to either tick this box or more enthusiastically embrace it with dedicated menus. Growing numbers of better travelled and more adventurous consumers are also leading to the emergence of more internationally-inspired, cross-over operators. One such practitioner is Yen Burger, which offers premium, Asian-influenced burgers. Indeed, it describes its core ‘Yen Burger’ (100% wagyu beef patty, fresh pickles, smoked turkey bacon, cheese and shiso leaf) as the ultimate ‘fusion burger’. Fusion foods have typically had somewhat of a mixed reaction at best so far in the UK, but just perhaps the timing previously not right. This example also raises the prospect of a ‘super-premium’ market opportunity. Again, while it would not become mass market, the enduring popularity of burgers and of consumers looking for prestige and added personalisation could well support a niche.

So, while Wave 5 is yet to emerge, it is likely to comprise a further splintering and more specialised phase of market evolution. Sitting alongside this, will be the pick of the crop from Waves 1-4 – across which, there will be a growing battleground near you. Burger retailers are in for a fight; Burgers fans are in for a treat.