UK alcoholic drinks giant Diageo reported that its Burger King fastfood subsidiary is returning its best US sales growth in years.
The news gives a shot in the arm to a turnaround that is attracting a number of suitors for BK. Known bidders include private investment funds Texas Pacific Group and Thomas H. Lee Partners, and trade buyer Triarc Cos, which owns the Arby’s restaurant chain. Other bidders remain in the frame too, sources close to the company say.
The growth in the US shows that changes made by BK chairman chief executive officer John Dasburg are paying off. These include a facelift to the menu, which offers veggie burgers and thicker milkshakes, as well as new joint ventures with companies including AOL Time Warner.
In February, Diageo conceded that BK’s comparable store sales for North America rose only 1% during the six months ended 31 December 2001, while the chain’s operating profit fell 29%. However, the company said it expected a much stronger second half.