Carl’s Jr. takes a shot at rival Jack in the Box
Carl’s Jr. launches campaign to outshine rival Jack in the Box amid declining fast-food sales.
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Carl’s Jr. has initiated a marketing campaign titled 'Pass on Jack' which rewards loyalty program members for bypassing rival Jack in the Box locations. This campaign coincides with notable declines in sales and closures for both brands, reflecting a more competitive landscape within the QSR sector.
Why It Matters
This competitive move may impact customer traffic between these two brands and highlights ongoing challenges within the QSR landscape, influencing unit economics for franchisees in California where both operate heavily.
Carl’s Jr., owned by CKE Restaurants in Nashville, has launched a marketing campaign titled “Pass on Jack” aimed at its competitor Jack in the Box, particularly targeting customers in California where both brands have a significant presence. The initiative encourages members of Carl’s Jr.'s loyalty program to submit proof—such as a GPS screenshot—showing they passed a Jack in the Box on their way to a Carl's Jr. location in order to earn a free Sourdough Star burger. This campaign began on Tuesday and runs until July 7.
The competition between these two fast-food chains dates back to their origins in California during the 1950s, with Jack in the Box's first restaurant opening in San Diego in 1951 and Carl’s Jr. following in Anaheim in 1956. Both brands have considerable locations in California, which has proven challenging due to increasing operational costs and a general decline in fast-food patronage. Jack in the Box currently operates 938 locations in California, constituting 44% of its more than 2,100 total locations, while Carl's Jr. is even more concentrated with 629 of its 992 locations, or 63.4%, situated in the same state.
Both brands have faced financial difficulties, with Carl’s Jr. reporting a 6% drop in U.S. system sales and the closure of nearly 4% of its domestic locations, although it experienced a 6.9% growth in international markets. Conversely, Jack in the Box, under interim CEO Mark King, experienced a 4.3% sales decline and closed 2.5% of its U.S. restaurants.
As the fast-food sector intensifies amidst competing pressures, Carl's Jr. is leveraging this campaign to not only promote customer loyalty but also to highlight its returning Sourdough Star offering. The outcome of this marketing strategy may hinge on how effectively it can shift customer traffic and boost sales, particularly given the landscape of reduced dining frequency among consumers. Operators and franchisees should closely monitor how this rivalry evolves, as it could dictate shifting market shares within the California fast-food industry.
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