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L.A. Burger Wars

East Coast versus West Coast clash in a battle for consumers as Five Guys moves into In-n-Out's territory.
April 11, 2011

LOS ANGELES - East Coast burger chain Five Guys is aggressively moving into the California marketplace, only to be met by West Cost burger icon In-N-Out. So should the West Coast stalwart worry? Some say the answer, without a doubt, is yes.

The Los Angeles Times wrote last week that one In-N-Out customer passed up her longtime favorite burger joint for Five Guys. "We chose this over In-N-Out," she said, noting that she liked the East Coast chain��s fresh, flavorful burgers and hand-cut fries.

And while Five Guys insists that it��s not out to compete with In-N-Out, the customers both chains rely on to keep business booming are obviously the same.

"They will definitely be a competitor to In-N-Out," Steve West, restaurant industry analyst for Stifel, Nicolaus & Co, told the newspaper, adding that their prices and products are comparable.

But more importantly to consider is the fierce loyalty of the California In-N-Out customer �" a huge hurdle that Five Guys will need to clear.

"They're going to probably take market share from In-N-Out," West told the newspaper, but Five Guys won��t supplant it. " In-N-Out is so cultish in Southern California, it's going to be hard to break that habit."

As for the competition coming into their backyard, In-N-Out isn��t planning to make any changes. "We've been focusing on the same thing for 62 years," Executive Vice President Carl Van Fleet told the newspaper. "Freshness, quality and cleanliness in our restaurants. We're just going to continue doing what we do."

Both restaurants rely on a simple menu with fresh ingredients (Read more about a Texas-based chain making inroads with a simple, well-executed offer in NACS Magazine). Location may end up being the biggest differentiator between the two fast-casual burger joints: In-N-Out has a drive-thru, and Five Guys has a strong presence in shopping malls.