March 18 (Bloomberg) -- Burger King Worldwide Inc., the second-biggest U.S. burger chain by store count, is introducing an application that will allow customers to pay for Whoppers with their smartphones as it races rivals to woo younger diners.
The program will be introduced next month and should be in all of Burger King’s more than 7,000 U.S. locations in “a few months,” Bryson Thornton, a spokesman for the company, said in an e-mailed statement. The option to order food and drinks ahead of time for later in-store pickup may be added, he said.
Fast-food chains including McDonald’s Corp. and Dunkin’ Brands Group Inc. are competing to quickly introduce the best loyalty programs and smartphone apps to try to attract millennials and teens. McDonald’s last year said it was testing coupon and mobile-payment apps at some of its U.S. locations. Dunkin’ Donuts rolled out a rewards programs to all of its domestic shops in January.
“I don’t think there is a clear leader,” Darren Tristano, executive vice president at Chicago-based Technomic Inc., said in a phone interview.
Burger King’s app, developed by Tillster Inc., will give customers coupons for deals, such as $1 any-size drinks and free fries, as well as nutrition facts. To pay with mobile phones, users can load value onto a virtual card within the app.
Mobile ordering and payment apps appeal to millennial diners -- those 18 to 35 years old, Tristano said.
“What younger consumers are looking for is the ability to use their phones to do everything,” he said. “The cell phone has replaced the wallet.”
About 19 percent of American consumers had recently used a mobile device to make a restaurant pickup or delivery order, according to a 2012 study from Technomic. That will probably increase as younger generations age, the researcher said.
McDonald’s, the largest U.S. burger chain, said in December that it was testing a smartphone app, called McD, at 1,000 U.S. stores. The trial app, created by Palo Alto, California-based Mowingo Inc., sent customers deals and discounts to redeem with their phones at participating stores.
Burger King fell 0.7 percent to $26.92 at the close in New York. Shares of the Miami-based company have gained 18 percent this year, while the Standard & Poor’s 500 Restaurants Index has lost 0.8 percent.
Burger King has been trying to boost same-store sales with new foods, including a Big King burger, and discounts such as a two-sandwiches-for-$5 deal. Sales at U.S. and Canadian restaurants open at least 13 months rose 0.2 percent in the fourth quarter, after dropping in the previous three quarters.
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