February 1, 2014 Updated: February 2, 2014 at 10:04 am
Judging from the number of hamburger restaurants in the Pikes Peak region, Colorado Springs-area residents love their burgers.
But industry competition is as tough as a burnt patty, and a couple of hamburger chains have gone out of business or left town in recent years.
Can new hamburger places find success in the Springs' crowded market?
We're about to find out.
Several new burger restaurants are coming to the Colorado Springs area or already have opened, and existing ones are growing their operations - adding to the competition in an industry where mom-and-pops, franchises and large chains vie for consumers' palates and wallets.
The local family that runs the longtime Bambino's Italian Eatery & Catering Co. in Colorado Springs plans to open the Skirted Heifer this month at 204 N. Tejon St. in the former location of La Creperie. Several doors away, Bingo Burger of Pueblo is targeting an April opening at 132 N. Tejon St. in a storefront formerly occupied by Bruegger's Bagels.
Meanwhile, a local franchisee of Jake's Wayback Burgers, founded in Delaware nearly 25 years ago, opened in November in the Woodmen Valley Shopping Center at Academy Boulevard and Woodmen Road. Five Guys Burgers & Fries, which opened on North Academy in 2008, will add a second location in late spring or summer at the First & Main Town Center, southeast of Powers Boulevard and North Carefree Circle.
They join dozens of fast-food, fast-casual and sit-down burger restaurants, along with local favorites - some of which have been around for decades. On top of that are the regional and national restaurant chains that have burgers as a menu staple.
Finding a balance
With so many choices and so much competition, how many hamburger restaurants can one market support?
There's no magic formula, according to Annika Stensson, a spokeswoman with the Washington, D.C.-based National Restaurant Association.
"In any segment of the restaurant industry, competition is pretty stiff, so a successful restaurant should balance uniqueness and value to attract both new and repeat customers," she said via email.
Competition in the burger business already has taken its toll. Conway's Red Top closed in 2012 amid financial woes after nearly 70 years as a local family chain, while Golden-based Good Times Burgers & Frozen Custard pulled out of the Springs the same year.
But that doesn't mean rival burger places can't find an audience, said Pete Meersman, president and CEO of the Colorado Restaurant Association. Large numbers of steakhouses, pizza places and other types of restaurants do well in a given market, despite the competition, he said.
"Do you take market share from another burger place if you open up a burger place?" Meersman said. "Maybe. But maybe you take market share from other types of establishments that aren't known as burger places."
Besides, restaurants aren't just butting heads with each other; they're after what industry statistics show are the 53 percent of consumers who regularly eat at home, Meersman said.
"I think the competition will be fierce," he added. "But I also think that the population is increasing down there. You've got a big military presence and these places will look for ways to differentiate themselves from each other and they'll all have their customers."
That's what the new eateries are aiming for, their owners say.
Looking to make mark
Husband and wife Kevin and Suzette Megyeri have operated Bambino's at Platte Avenue and Circle Drive since 1978, and their family once had three other locations. Bambino's will remain open, but the couple also wanted to try something smaller and simpler, Suzette said.
Their 700-square-foot Skirted Heifer will have a streamlined menu focused on burgers of 100 percent grass-fed beef. The menu also will offer fresh-cut regular and sweet-potato fries; a focciacia bun made of Bambino's homemade pizza dough and flavored with roasted garlic, seasoning and olive oil; and natural sodas sweetened with pure cane sugar - no Pepsi or Coke.
The Megyeris also say their restaurant will be environmentally friendly. They'll use energy-efficient equipment, recycle frying oil into bio-diesel fuel and create furniture out of reclaimed wood from the Waldo Canyon and Black Forest fires.
Richard Warner opened Bingo Burger in Pueblo four years ago and often gets Colorado Springs customers. Putting a store in the Springs is a natural progression as he looks to open more locations along the Front Range, he said. He's targeting downtown employees, business people and residents instead of being in suburban areas "where all the franchises and chains are."
His menu focuses on Colorado foods, he said. He buys his beef from Ranch Foods Direct in the Springs and uses fire-roasted Pueblo chilies in his signature burger to give it a kick, he said. His French fries come from San Luis Valley potato farmers. The restaurant also will offer 18 to 20 varieties of Colorado craft beers.
"We feel it's really important to try to support the local economy by buying from the local farmers, ranchers and vendors," he said.
Meanwhile, it took local residents Tim and Rowena Pascoe a little more than four years to open Jake's Wayback Burgers - the first in Colorado - after signing a franchise agreement in August 2009. A Springs shopping center where they planned to locate fell into foreclosure and delayed their plans, Tim Pascoe said.
As its name implies, Jake's Wayback features old-fashioned menu items: fresh beef in its made-to-order burgers and shakes made with ice cream and milk. The menu is broader than some burger places, also offering hot dogs, chicken and turkey sandwiches and salads. Pascoe also hopes to add beer and wine in the next three to six months.
Service, however, is based on today's needs, Pascoe said. Customers can order ahead of time online, and Pascoe said he hopes to add delivery. Burgers aren't common delivery items; the trick, he said, would be to keep the burgers hot and the shakes cold.
Years ago, Pascoe said, "nobody delivered pizza. But Dominos seems to have done well with that."
Keeping it simple
Five Guys Burgers & Fries keeps its menu relatively simple, with the emphasis on the two items in its name, although the menu also includes hot dogs and a handful of sandwiches.
Like other places, Five Guys stresses fresh beef and fresh-cut fries (the restaurant only has a cooler, not a freezer), and customer service, franchisee Jeff Parker said.
But the trick is to execute, not just talk, he said. If customers have a bad experience with food or don't like the cleanliness of the restaurant, the restaurant risks losing them.
"We don't have a lot of things on our menu," Parker said. "If we screw up the fries, we've screwed up half the menu."
Five Guys relies on word of mouth and doesn't advertise, which makes execution all the more important, Parker said. The Virginia-based, family-owned Five Guys also emphasizes quality employees and management, he said.
Money that's not going into marketing is funneled into training and bonus programs, Parker said.
That's key, because marketing and advertising by themselves will not build business over the long term, said Stensson, of the National Restaurant Association.
"Customers look at a lot of different attributes when choosing where to dine, with good service, good value, favorite menu items and decor/atmosphere among the top ones," she said.
Restaurant operators also must focus on holding the line on costs to stay profitable, Stensson said. Typical restaurants operate on just a 3 percent to 5 percent pre-tax profit margin, she said.
In fact, a combination of factors - such as rising rents and other bottom-line costs - can be factors in whether restaurants succeed or flop, Meersman said.
Those concerns aren't lost on some of the new burger places.
Suzette Megyeri said she and her husband already decided to launch the Skirted Heifer before they knew Bingo Burger planned to open down the street. That competition, along with the other pressures of opening a new business, has made everything "a little crazy," she said.
"Whenever you open up a business, there's doubt and there's competition," Megyeri said.
"Bambinos has been really good to us," she added. "We've been fortunate enough to have this job for 30 years and be our own boss doing it. It's been great. But I'm really excited to do something new. On the other hand, I'm nervous. We've got bills to pay. And we don't have corporate backing."
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