By Annie Gasparro Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- From expanding salad options to turkey burgers, restaurant chains are looking to healthier offerings to drive traffic and buffet margins from rising costs, most notably beef. However, while low-calorie offerings may look good on the menu, their ability to actually boost sales or profits may be limited. "There are benefits to diverting customers away from beef," given its rough margins now, said Lynne Collier, a restaurant analyst with Sterne Agee. "But let's say 2% of their sales are turkey burgers and the other 98% are regular burgers, I don't think it will make a big difference in their earnings." Beef prices have risen roughly 6% from September to the end of February, according to the U.S. Department of Agriculture, but whole frozen turkey prices have dropped 2.5% in that time. Fruit and vegetable prices are also falling now that cold weather in the southern U.S. and Mexico is easing, making new salad and fruit offerings even more attractive menu additions for chains, particularly with a new federal law on the horizon that will require chains to disclose nutrition facts. The latest salvo in the move to healthier options comes in the form of turkey burgers from Hardee's and Carl's Jr., both owned by CKE Restaurants. The chains are switching from touting 1,000-calorie-plus burgers to just under 500-calorie turkey burgers. Those calorie counts will become all the more prominent when the Food and Drug Administration releases it's proposal for the menu labeling law, which is expected to require chain restaurants to disclose calorie counts on their menus as well as provide other nutrition information. The proposal was due last week but is experiencing a "short delay" due to the complexity of the issue, an FDA spokesman said. The regulations are supposed to go in to effect late next year. The National Restaurant Association said chains don't mind revealing their calorie counts, they just want a standard nation-wide regulation and a reasonable implementation period. "Many chains have been providing this information for a long time," a spokeswoman said. "And the ones who haven't are certainly doing what they can now to prepare for it." For instance, DineEquity Inc. (DIN) is getting ready for the changes by implementing a "simple and fit" menu at its IHOP chain last fall and an under 550 calories menu at Applebee's to go along with expanding its Weight Watchers menu earlier this year. "I think the new regulations will be good for us, because we will finally get some credit for all the things we've been doing with our healthy menu options," said DineEquity Chief Executive Julia Stewart. While similar state laws already in effect in places like New York suggest there is limited impact from posting calorie counts, NPD Group, a market research firm, said having healthier options can take out the initial sting. NDP conducted a study on the effects of adding calorie counts to menus, and said the results showed that on average, consumers spent 20 cents less on their meals when ordering off a menu with calories displayed. Bonnie Riggs, NPD Group restaurant analyst, said chains can reduce the impact of calorie counts on check values by throwing in healthier side items to ensure customers are replacing those fatty French fries with something just as pricey. "The restaurant industry is trying to get ready for the changes and stay ahead of the curve," Riggs said. "But it's really difficult to carry something like a turkey burger on the menu, because if it doesn't taste good, people aren't going to buy it. There's a reason you never see veggie burgers at fast food chains either." Wendy's/Arby's Group Inc. (WEN) has gone to great lengths to promote its new line of Wendy's salads and other healthier alternatives, but it has no plans for a turkey burger, a spokesman said. Quite the contrary, Wendy's is coming out with a bigger, fancier burger later this year. McDonald's Corp. (MCD), which already posts nutritional information publicly, said it isn't currently looking at a turkey option. "From our perspective, there's not a broad enough appeal yet for it to make sense for us," a spokeswoman said. Also, the burger giant really doesn't face the same commodities cost pressures as other chains, given its scale and relationships with suppliers. -By Annie Gasparro, Dow Jones Newswires; 212-416-2244; annie.gasparro@dowjones.com
