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Five Guys

First Shake Shack, then FIVE GUYS: Can existing fast-food chains take the heat?

Hot on the heels of A&W’s revival and entry of Shake Shack and Burger & Lobster at Jewel Changi, a new cult favourite FIVE GUYS has joined the fast-food scene in Singapore. Unlike the recent brands setting up in Changi, FIVE GUYS will be opening in the last quarter of this year at the central location of Plaza Singapura, which is deemed by many as as convenient, easily accessible, and has traffic.

Zouk, which brought FIVE GUYS to Singapore, said the reason international fast-food brands have caught on so quickly is due to their strong branding. The fact that well-travelled Singaporeans are naturally exposed to food and culture globally also helped, said Zouk Group CEO Andrew Li in a statement to Marketing.

“People know what they can expect from these fast-food chains and they are familiar with these brands, so it makes them all the more relatable,” he added. He added that consumers will always go back to their favourite joints time and again out of nostalgia, and that spot in consumers’ hearts is what brands are vying for. FIVE GUYS’ strength, according to him, is its simple but highly customisable menu.

For a nation that prides itself on its cosmopolitan palette and its myriad of offerings, it comes as no surprise that more and more global brands are setting their sights on the little island. With new fast-food brands entrants setting up their homes in Singapore, established brands such as McDonald’s, KFC, PizzaHut, Burger King, Jollibee and the will no doubt be feeling some heat.

Nevertheless, existing established fast-food brands can stand up to the rising competition if they can bring something new to the table often enough that creates hype, said several industry players Marketing spoke with. Citing McDonald’s successful Nasi Lemak burger as a product, and as a talkability factor, SPRG general manager for Singapore Edwin Yeo said product innovation can help to generate excitement among consumers and push footfall. In some cases, it can even drive loyalty.

While there will be a period where consumers will flock to the newer outlets, he said that it is “unlikely” that customers who grew up eating McDonald’s would just stop because of the new entrants. While the hype at this point might be at a high around these new brands, Yeo remained skeptical to the longevity of the new entrants with many predecessors such as Taco bell, Wendy’s, and Japan’s Freshness Burger sticking around for only a few years. Moreover, for the international brands to sustain the hype, Yeo said it is critical for them to live up to its standards abroad.

Strategic marketing a must

An area to watch out for, Yeo added, is creativity in marketing. He explained that many players tend to repeat tried and tested marketing campaigns and methods which probably doesn’t do product innovation enough justice.

“It will certainly present marketing challenges to the incumbent brands, but you’d expect a well-oiled response from McDonald’s with more product innovation and marketing,” he said. He added that the challenge would probably lie greater with brands such as Burger King and Mos Burger, who were already served a smaller piece of the pie, prior to the entry of the new players.

Meanwhile, the affordability factor could also give traditional fast-food chains a leg up in the competition, said Geometry Singapore group account director Jen Hoskote, since a lot of the brands entering the market are in the mid-to-premium range. “A burger at Burger & Lobster is somewhere around SG$25, whereas a Whopper Meal will only set you back around SG$10. They aren’t exactly in direct competition,” she added.

However, traditional players will need to be strategic in their marketing mix and creative in their product offering to stay relevant.

Hoskote suggested forging creative partnerships with complementary brands or even different industries.

To illustrate her point, she highlighted the case of Dunkin’ Donuts, which had partnered with shoe company Saucony to create running shoes inspired by its doughnuts using the brand’s colour palette ahead of the Boston Marathon.

“This is a fun way for brands to cross-promote while gaining access to new audiences and staying culturally relevant,” added Hoskote.

Read more:
Beyond the hype: Can Jewel Changi create longevity in its footfall?
Entering SG’s F&B scene: Are international brands biting off more than they can chew?
Do quick service restaurants in MY need to pick up pace in embracing change?

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