First Bite: Recent Episodes
Nation's Restaurant News
Welcome to Nation’s Restaurant News’ newest podcast, First Bite. This podcast, hosted by digital editor Holly Petre, is your morning burst of news followed by a deep dive into one of the trending stories of the day. Delivered to your phone early every morning, this podcast is here to bring you the news alongside your first cup of coffee, plus some context from an NRN senior editor on one of their stories. Subscribe to First Bite now on Apple Podcasts, Spotify or wherever you get your podcasts.
MOD Pizza has been sold. The wave of restaurant discounts appears to be working. And Chili's gets sued by the Beastie Boys.
This is the last episode to appear on the First Bite channel! If you would like more daily updates on the restaurant industry, subscribe to Restaurant Daily at Apple Podcasts here and Spotify here.
It's a strange moment for restaurant mergers and acquisitions. Chipotle's CFO is retiring. And Burger King is heating up its menu.
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Customers found a loophole in McDonald's $5 meal deal. Fast-food restaurants in a California city are switching to reusable cups. And two big AI suppliers are joining forces.
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A fast-growing pizza chain is expected to file for bankruptcy protection. Panera's overhauled menu appears to be a hit. And Dave's Hot Chicken is expanding to a new country.
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MOD Pizza is reportedly considering a bankruptcy filing. Fast-food restaurants in LA are facing more labor regulations. And menu innovation is defying the dog days of summer.
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How is California's new fast-food minimum wage impacting restaurant traffic? Boston Market's creditors are finding there's not much in the bank. And the president is cracking down on heat safety for workers.
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Restaurant Brands International is buying back its China business. Craveworthy Brands opened a food hall. And Chipotle taps Olympic athletes for its latest promotion.
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The summer of the value meal is upon us. Kura Sushi says business slowed in California. And which chains saw the most organic growth last year?
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An Arby's operator declared bankruptcy. Panera Bread confirms it was hit with a cyberattack. And consumers are finding less value at Chick-fil-A.
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Starbucks is serving its customers an added jolt. Perkins is undergoing an extreme makeover. And Grubhub is taking a big plunge into grocery delivery.
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Hooters closes some struggling restaurants. A Subway franchisee files for bankruptcy. And see the brands that are doing the best at satisfying their customers.
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Uncle Julio's apparently has a potential buyer in the wings. American Express bought reservations platform Tock. And, if you've noticed a lot of steak on fast-casual menus, you may be onto something.
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A number of small restaurant chains have filed for bankruptcy recently. Pizza Hut is trying to terminate one of its largest franchisees. And another bankrupt chain gets hit with an employee lawsuit.
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Accomplished chef James Kent has died. Fast-casual pizza chain Blaze overhauled its brand. And Asian concepts were among the winners in casual dining last year.
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McDonald's is ending its AI drive-thru test. Former Red Lobster employees are suing the chain. And a TGI Fridays operator files for bankruptcy.
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The Supreme Court delivers a win for Starbucks. The economy comes for Dave & Buster's. And yet another chain launches a meal bundle.
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Alamo Drafthouse has been sold. There's good news and bad news on the menu price inflation front. And Starbucks is joining the value wars.
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Today’s episode is bittersweet, as it is the last episode of First Bite — but with an exciting twist.
Starbucks and Grubhub announced a partnership on Thursday that would allow customers to order Starbucks delivery via the Grubhub app for the first time ever. The delivery partnership will roll out to select markets in Pennsylvania, Colorado, and Illinois in June, and expand to the rest of Grubhub’s markets across the 50 states by August.
According to Grubhub, Starbucks is the most searched merchant on its app that is not yet available. Overall, Starbucks has been slower to partner with third-party delivery companies than many other top chains in the foodservice industry. While the company began offering third-party delivery through Uber Eats in select markets in 2018, Uber Eats delivery was not available nationally until 2020. Starbucks did not begin offering delivery with DoorDash until last January, and the partnership was not expanded nationally until March 2023.
Grubhub is the final delivery company of the “big three” that Starbucks is now partnering with, though the company has the smallest delivery market share at 8% (as compared with DoorDash’s 67% and Uber Eats’ 23%), according to Bloomberg Second Measure.
Chipotle was one of very few winners from Q1’s financial reports and the company’s momentum certainly didn’t start there. In fact, you’d have to go back to the second quarter of 2020 – the pandemic quarter, if you will – to find a negative same-store sales number.
The company’s engine has no doubt been churning at full speed of late, as evidenced by share prices jumping by nearly 75% since October alone. There are several factors pushing the company to new heights, including a sharpened focus on throughput and a prioritization of the employee proposition. For that latter piece, Chipotle has continuously evolved its benefits to include mental healthcare, expanded parental leave, tuition reimbursement, English as a Second Language classes, pet insurance, and more. Most recently, the company added a service that provides faster access to paychecks, as well as a matching contribution to 401(k) workers’ student loan repayments. This continuous evolution of benefits is informed by town hall meetings each quarter, a “pulse survey” every other year that goes out to all the company’s 120,000 employees, and a benefits department that is highly in touch with workers’ changing demands.
Less than a week after abruptly closing nearly 50 California locations, Rubio’s has filed for Chapter 11 bankruptcy protection. The company said it is pursuing this action to facilitate the sale of the 41-year-old business, adding that its remaining 86 locations in California, Arizona, and Nevada will continue to operate as is.
The company has cited challenging economic conditions, diminishing in-store traffic driven by sustained work-from-home trends, rising food and utility costs, and “significant increases to the minimum wage in California.” On April 1, California’s minimum wage increased by 25% to $20 an hour.
Rubio’s is seeking court approval to continue operations during the sale process to ensure continued payment of employee wages and benefits. All gift cards and rewards will be honored at the remaining 86 locations.
Utah-based dirty soda chain Swig announced Monday the appointment of former Dutch Bros executive, Daniel Batty, as the fast-growing concept’s first chief development officer.
In jumping from one fast-growing beverage chain to another, Batty will help Swig to achieve its long-term goal of growing from 70 locations to 1,400 units over the next eight years.
Swig is best known for being at the forefront of the dirty soda beverage trend — which combines soda, dairy creamer, and flavored syrups and is popular in Utah — and was one of the fastest growing new concepts last year. According to Technomic Top 500 data, Swig had the second-fastest sales growth rate across the beverage and snack category at 39.1%. Swig also had the third-fastest unit growth rate in the category, behind only Crumbl and HTeaO.
With an ambitious long-term goal of building more than 1,300 stores in mind, the company will probably be about 900 franchised shops and 500 corporate stores, with corporate growth likely to move along quicker than franchise growth. Batty is currently in talks with the Swig leadership team to put a development plan in place.
Cracker Barrel Old Country Store – the brand best known for rocking chairs out front, a gift shop of tchotchkes inside, and for being the restaurant of choice for road tripping families — has been struggling for a long time.
After several quarters of negative traffic and sales, new CEO Julie Felss-Masino announced last month that the family-dining chain would be undergoing a brand makeover to become more relevant, with five pillars of change, ranging from store remodels and tech investments to menu changes and pricing. While brand makeovers are not unusual (Domino’s and Papa Johns both announced new strategic overhauls at the start of the year), Cracker Barrel needs to walk a pretty narrow balance beam of modernizing the brand without drifting from the kitschy, homey vibe the chain is famous for.
During Cracker Barrel’s investor update call, which was hosted just two weeks before the company’s Q3 quarterly earnings, Massino broke down the ways in which the company is trying to dig itself out of the red and onto a positive path forward. While these company updates typically don’t pique the interest of the public outside of investor and restaurant news circles, mainstream media picked up the story, and Cracker Barrel was trending on X, the social media platform formerly known as Twitter.
While pricing continues to be a hot topic and challenging conundrum for restaurant operators in 2024, Domino’s Pizza is confident in its firm stance on the pizza delivery value equation. The Ann Arbor-based company purposefully did not raise prices last year and has not done so thus far this year, which has been beneficial for the bottom line, Domino’s CEO Russell Weiner said in a fireside chat during the annual Bernstein’s Strategic Decisions conference.
As most quick-service restaurant chains struggle to balance profitability with perception of value and affordability, particularly for lower income consumers, raising prices has been a common strategy. However, as NRN recently reported, 78% of Americans now believe that fast food is a luxury purchase, according to a new LendingTree study.
According to Russell Weiner, Domino’s saw the writing on the wall about consumer spending in this inflationary environment and pumped the brakes on pricing a bit earlier than most.
BurgerFi announced that it would be rebranding to ChickenFi as it introduces new chicken sandwiches. There is no indication if this is a permanent rebrand or a temporary marketing move.
The Fort Lauderdale, Fla.-based fast-casual restaurant brand debuted a fried-chicken sandwich and a grilled-chicken sandwich on its permanent menu on May 21.
The chain’s chicken breast is prepared sous-vide. The new sandwiches come grilled or hand-breaded and fried, topped with fresh lettuce, tomato, pickles, and honey mustard.
The new sandwiches join the brand’s Jumbo Chicken Wings, Chicken Tenders, and Grilled Chicken Bowls.
Since the debut of Popeyes’ chicken sandwich in 2019, there’s been a surge in chicken-sandwich products across the industry, many brands trying to chase Chick-fil-A’s success in the category.
Technomic data shows that chicken sandwiches are continually increasing on menus despite their seeming ubiquity. In 2023, chicken sandwiches grew on menus by 0.4% and the five-year growth is expected to be 1.1%.
A recent CNN study of earnings calls and analyst notes finds that the word of the summer – on Wall Street, at least – is “bifurcation,” or the division of something into two parts. In this specific instance, bifurcation means that high-income consumers are plugging along just fine, while low-income consumers are really starting to struggle.
Indeed, 80% of American households have less cash available than they did in 2019, while credit card debt has reached a historic high. Meanwhile, a JP Morgan survey found that over 70% of low-income consumers are having a hard time making ends meet. Notably, middle-income households are also feeling pinched; 67% believe their income is falling behind the current cost of living.
The fast-casual category first became a thing in the 1990s (about the time Chipotle emerged) and came of age in the 2010s following the Great Recession, when consumers wanted more bang for their buck in the form of value, speed, and quality. The category came to be defined as a sort of elevated QSR but without the full-service component of casual dining.
Fast forward to this post-pandemic environment and fast casual has become a rare sweet spot of growth for the industry as price point lines continue to blur between segments. In the past several quarters, as inflation-weary consumers pull back on visits to most casual-dining concepts and some quick-service concepts, fast-casual players like Potbelly, Chipotle, Wingstop, CAVA, and Shake Shack have enjoyed traffic lifts — in some instances quite significant. The segment has also outperformed on sales. According to recently released Technomic data, fast-casual sales in 2023 grew by 11.2%, followed by quick-service sales at 7.9%. Family-dining restaurants grew by 5.7% and casual-dining chains grew by 4.7%.
No matter how it’s defined, growth in any capacity requires capital and capital remains expensive; the Fed raised interest rates 11 times between March 2022 and July 2023 to combat relentlessly high inflation. A cooldown has yet to happen, which has kept a lot of investors on the sidelines.
Of course, there’s an ironic twist at play here. Those rates remain high because demand remains high. Driving much of this environment is a sturdy set of consumers with more wages in their pockets and a continued pent-up demand from the pandemic. Those consumers, especially younger ones, have also proven that they really, really like to frequent restaurants. And so here we are, with a murky understanding of what exactly growth means at this post-pandemic juncture.
The consensus is that most of the industry’s growth from this point will come from higher demand concepts focused on convenience. High rates haven’t derailed the quick-service or fast-casual segments, for instance, or many bigger players in general. According to Technomic data, the top 500 chains increased sales in 2023 by $31 billion, or nearly 8%. During the recent Restaurant Leadership Conference, Technomic Managing Principal Joe Pawlak called it a “very, very strong growth year” for those at the top.
The most popular technology tool on display at the 2024 National Restaurant Association Show in Chicago was mostly invisible. What do the robotic arms, POS systems, back of house analytics tools, and more booth gadgets have in common? Most of them are powered by and supported by data. Data — whether it’s collected by machine learning or AI — has proven to be the universal currency of restaurant technology in 2024 and beyond.
Operators are waking up to the significance of data collection and optimization in operational decision-making, from employee scheduling and inventory management, to marketing data about customers. This was especially evident at the Restaurant Show, where almost every booth at the tech pavilion went into detail about the data their software (and sometimes hardware) provides.
The restaurant industry has a labor shortage problem. That is certainly not breaking news. Employee engagement is at an 11-year low. That might surprise some folks.
Gusto founder/CEO Nate Hybl said this conversation about employees is long overdue.
The bigger companies are already focusing more on the employee proposition, but smaller brands need to make people development a part of their budget, Hybl added. He suggested taking 1-2% off the topline to invest in people.
Hybl said acknowledging and understanding the Gen Z mindset of work/life balance and diversity and inclusion are more important than they’ve ever been, in fact, he added that the pandemic changed the employee mindset and gave more leverage to hourly workers.
There have been many iterations of eatertainment over the years. It began with stalwart chains like Chuck E. Cheese and Dave & Buster’s, places to play arcade games and win tokens that would lead to prizes.
Over the past 10 years, that idea has been flipped. Eatertainment had moved onto larger-scale games like bowling and pool. Chains like Punch Bowl Social, founded in 2012, were also focused on offering upscale food and drink in a hipper environment.
Following the struggles of Punch Bowl Social, which filed for bankruptcy in December 2020, a new class of eatertainment venues have arrived. For the most part, they are concepts based on sports ranging from golf to pickleball to bowling. They’re just as focused on elevated food and drink offerings as their predecessors, but the concepts focus on just one or two larger-scale games rather than several.
With the focus on just one game, these eatertainment concepts have been able to drill into what makes each brand special. For most of them, it’s technology that elevates gameplay.
Restaurant value used to be a much simpler calculation: Discount-driven customers would seek out dollar meals at quick-service restaurants, call for pizza delivery on Friday nights (sans delivery fees), and then splurge on full-service meals on rarer occasions. But in 2024, with dollar menus all but extinct, and newer variables like convenience pricing, service fees, shrinkflation, and dynamic pricing in the mix, the consumer value equation has never been more complex.
Or has it? Customers may have more options than ever before, from ordering almost any food they want from the comfort of their own home to choosing to dine out “the old-fashioned way” (and every “channel” in between), but spending habits have not changed as much as we might think they have. According to data from Technomic, customers are roughly as price-conscious now as they were just before the pandemic. In a survey, half of customers said that they picked restaurants with lower prices in Q1 2020, while 52% of customers said they do so in Q1 2024, and the exact same percentage of customers (68%) said they pay close attention to menu prices in both Q1 2020 and Q1 2024.
Red Lobster abruptly closed some 87 restaurants on Monday as the chain faces apparent cash-flow issues and loss of confidence from its largest owner. USA Today compiled a list of all of the shuttered restaurants listed on the chain’s web site. The closed locations are in 28 states, with the largest number, 16, in its home state of Florida, including three in Orlando.
Auction site Tagex has listed 48 closed Red Lobster locations and has put all of their contents up for sale in an auction scheduled to end on Tuesday. They’re “Winner Takes All” auctions, meaning buyers are bidding on the total contents of each restaurant.
Thai Union, which has long been a large minority shareholder in Red Lobster, said in January it would sell its stake in the company and has reportedly been looking for buyers ever since.
Since we’re officially more than halfway through Q1 earnings reports, it’s fair game to derive some of the winners from the start of 2024. Unquestionably among them is Chipotle, which experienced a 7% increase in same-store sales driven in large part by a 5.4% increase in traffic.
To understand the secret of Chipotle’s momentum of late, it’s important to understand its sharpened focus on throughput. Indeed, the word “throughput” was mentioned 33 times during the company’s earnings call April 24. Unsurprisingly, several brands, from Cheesecake Factory to Starbucks to Portillo’s, have noted a more intentional prioritization of throughput, because why wouldn’t they want to emulate Chipotle’s recent success? That said, they all have some catching up to do to get on the same playing field as Chipotle.
Andy Wiederhorn — former CEO and current chairman of FAT Brands — has been accused by the U.S. Securities and Exchange Commission of misappropriating $27 million of company money and using it to “fund his lavish lifestyle,” a complaint filed on May 10 by federal prosecutors in the Central District Court of California reads.
The complaint was filed three months after the SEC concluded its investigation into Wiederhorn, who was being inspected by federal authorities under allegations of securities and wire fraud, money laundering, and attempted tax evasion. This is not the first time Wiederhorn has run afoul of federal law: he previously served time in prison for tax fraud from 2005-2006. In 2023, he stepped down as CEO of the company, but has still been running earnings calls since then.
TikToker “MiriTheSiren” was known for posting her creative Chick-fil-A meals, videos that were meant to inspire consumers to think of innovative ways to eat fast food. The TikToker, whose real name is Miri, was a Chick-fil-A employee, sharing how she mixed items at the store for her free meal every day.
Quickly, Miri gained a following with her videos going viral, garnering tens of millions of views on her videos between January and April of this year. But Chick-fil-A wasn’t happy.
The Atlanta-based chicken chain made Miri stop posting videos because they violated the employee handbook, as she explained, and the company would not be making an exception for her or collaborating on any future posts.
“People do that stuff as it’s convenient, and they back-burner more often,” said Lena Katz, lead, creator-integrated services at Ampersand (AOI-Pro). “Once one side begins to feel exploited, the relationship sours or ends.”
Los Angeles-based Sweetgreen is besting many of its restaurant competitors in the first quarter. The fast-casual chain reported 5% same-store sales increases and a 26% revenue increase year-over-year.
Sweetgreen CEO Jonathan Neman stated that while January was tough with weather, the benefit of two holidays in the first quarter was a boon to business.
The quarter, ended March 31, saw most of its success from 41 net new store openings over the past year, resulting in $21.1 million in additional revenue.
CFO Mitch Reback mentioned that Sweetgreen was impacted by AB1228, increasing wages in late February. While it’s too early to see the full results, he said, the brand has made some adjustments.
Papa Johns’ customers are spending less than they had previously, and when they do spend money on pizza, they are more likely to choose third-party aggregators over the company’s first-party delivery channels. This shift in mix balance was a primary driver behind the Atlanta-based pizza chain’s 2% decline in North America same-store sales, as well as revenue and overall sales deflation for the first quarter ended March 31, 2024.
Sales from aggregator channels have grown to 16% this quarter, as compared with 12% the same quarter of 2023, meanwhile organic delivery has declined year-over-year, while carryout remains flat. This highlights the quandary operators face when utilizing third-party apps: they are crucial to pull in new and non-regular customers, but operators lose revenue from these transactions.
Dine Brands’ first quarter results included same-store sales declines at both Applebee’s (-4.6%) and, for the first time in 11 quarters, IHOP (-1.7%), highlighting a continuing narrative across the industry about increasing consumer sensitivity. Despite a few exceptions, that narrative has impacted concepts across segments, from McDonald’s and KFC to First Watch and Starbucks.
At a time when many restaurant companies are struggling to get customers in the door, Dutch Bros is one of the better success stories for the first quarter of 2024. In Q1, the Oregon-based coffee chain saw 10% same-store sales growth, attributable mostly to menu pricing increases, discounting, and positive traffic trends.
Traffic will likely continue an upward growth trajectory after Dutch Bros starts accepting mobile order and pay, which the company will begin offering for the first time by the end of 2024, in partnership with Olo. The new partnership and mobile order and pay solution is currently in test mode at seven locations, and is meant to boost operational efficiency, especially for guests that want to cut down on wait times at the drive-thru lane.
During the first quarter of 2024, FAT Brands continued its journey toward profitability and revenue growth through continued acquisition and physical expansion. The company reported skyrocketing revenues of 43.8%, primarily attributable to the acquisition of Smokey Bones in Sept. 2023.
Despite a growing portfolio — which has expanded tenfold in three years — FAT Brands continues to struggle with profitability as the company reported a net loss of $38.3 million, attributable to increased costs and expenses associated with multiple brand acquisitions over the past several years, including Fazoli’s and Nestle Toll House Café in May 2022. FAT Brands chairman of the board, Andy Weiderhorn, noted that the upcoming (though seemingly delayed) Twin Peaks IPO would be used to tamp down the company’s debt to income ratio.
Whataburger is upgrading its coffee offerings with new hot and iced coffee, a new sweet cream, and a limited-time shake to promote the change. They’re being rolled out on May 7.
The same blend of Arabica coffee beans from Colombia, Nicaragua, Guatemala, and Honduras are being used for both hot and iced coffees, but the roast is different.
Squash doesn’t seem like the most charismatic of vegetables. Even the name sounds like a failure. But many chefs are into them. They say each one has its own unique qualities, with summer varieties offering fresh, clean tastes and winter ones providing sweetness and a sort of implied richness, despite their low fat content, that can help lighter dishes seem more satisfying.
The difference between chefs’ love for squash and consumer perception might be reflected in Technomic’s Ignite menu data, which indicates that mentions of squash on United States menus overall decreased by 7% between the end of 2022 and the end of 2023. But butternut squash soup mentions are up by 19.6%, and squash mentions in fine-dining restaurants are up by 8%.
One big squash advocate is Dan Barber, chef of Blue Hill at Stone Barns in Pocantico Hills, N.Y., and Family Meal at Blue Hill in New York City.
Barber also is the founder of a seed company, Row 7, that essentially got its start developing new squash varieties, including the popular koginut, a variation of butternut that is now grown nationwide.
Starbucks reported a same-store sales decline for the second quarter of 2024, for the first time in almost three years since the peak of the pandemic, as shares of the Seattle-based coffee chain plummeted 16% over the past day.
According to CEO Laxman Narasimhan, the global same-store sales drop of 4% was driven by declining traffic in North America, issues in China and the Middle East, bad weather, and “a more cautious consumer overall.” Additionally, Starbucks revised its annual fiscal guidance to reflect a more reserved growth outlook as the company attempts to reverse this negative sales trend.
Besides reaching these occasional guests, Starbucks leadership emphasized that many of the issues over the past quarter came down to challenges with meeting demand, particularly during peak morning hours.
During Yum Brands’ earnings call Wednesday morning, executives were somewhat upbeat, touting the resiliency of the company’s brands in a challenging operating environment and pointing to core operating profit gains and digital sales increases as reasons for their optimism. Additionally, executives cited sequential improvements from January’s weather impacts, as well as easing headwinds from tension in its Middle East markets.
Technology was the focal point of that optimism, with CEO David Gibbs noting that Q1 marked the first time the Yum system surpassed over 50% in digital sales, representing about $30 billion in annualized, digital sales. These sales were driven by the continued rollout of Click and Collect and kiosks.
One example is voice AI at the drive-thru, which Yum has been testing at five Taco Bell restaurants in California. The company is expanding the test into 30 restaurants in Q2 based on positive feedback. Yum is also piloting AI in its proprietary app, which makes it easier for general managers to access information to make decisions.
Domino’s Pizza is starting the fiscal year off strong with Q1 earnings highlights that include 5.6% same-store sales growth driven by transaction growth from the company’s new loyalty program.
In a Q1 earnings call, Domino’s CEO Russell Weiner discussed how the loyalty program is synergistic with other elements of the company’s previously announced “Hungry for More” strategy for 2024, including menu innovation. For example, the new New York Style pizza launching this week, made with thinner crust and a provolone cheese blend, is now available as a rewards deal.
All roads lead back to the loyalty program: Domino’s highly successful “Emergency Pizza” promotion, which gave away $1 million of free pizzas last fall, was effectively a rebranded “BOGO” coupon, that allowed customers to come back and cash in their free pizza at a later date. For Domino’s, it allowed the company to welcome new customers and lapsed customers back into the fold.
Chipotle reported first quarter results after market close Wednesday and the company once again bucked the industry’s declining traffic trends, turning in a plus-5% increase in transactions. Credit Chicken Al Pastor, barbacoa, and improved throughput to meet demand for both.
The company also generated 7% comp sales growth, while system sales grew 15% to reach $2.7 billion. CEO Brian Niccol said in-store sales were up by nearly 20% as throughput reached its highest level in four years. That throughput improvement has stemmed from the company’s Project Square One, first put into place during the summer of 2022 to prioritize a focus on operational fundamentals for a workforce that largely dissipated during the pandemic. The company improved its throughput by nearly two entrees during its peak 15-minute timeframe versus last year, with sequential improvements each month. Niccol said its operations initiative focuses on four areas, including expediting the bagging and payment process and ensuring the manager supplies both lines with food to avoid interruption.
As food delivery becomes synonymous with the restaurant experience — data from McKinsey and Company shows that the value of the food delivery industry has more than tripled since 2017 — the need for guardrails around the still-budding segment of the restaurant industry has grown.
The amount of both regional legislation and individual litigation attempting to regulate and mitigate issues with the food delivery industry has escalated recently. Over the past two months alone, Florida passed a bill requiring delivery apps to get permission from restaurants before arranging pickups, a New York City councilmember just proposed a bill that would require delivery apps to allow customers to tip before placing orders, and California put forth a bill that would require delivery app providers to provide an itemized breakdown of fees at checkout, including a disclosure of restaurant-facing fees.
While restaurant operators continue to struggle with both labor costs and employee retention, the foodservice industry may very well have deeper employee-side problems. According to a study of Glassdoor reviews just released from BBADegree.org (an organization that provides resources for prospective business professionals seeking higher education), workers in the restaurant and foodservice industry complain about burnout the most, as compared with other industries.
Chipotle Mexican Grill scored a 97.72 out of 100 on the organization’s burnout rating score, second only to Progressive Insurance as the workplace with the most complaints of burnout, with “stressful” being the most common word used to describe the workplace environment. According to the Glassdoor reviews that mentioned burnout, Starbucks was also in the top 10 companies out of the 550+ companies surveyed. As non-franchised organizations, the reviews of both Starbucks and Chipotle are overwhelmingly from corporate employees.
Starbucks and the National Labor Relations Board faced off Tuesday at the U.S. Supreme Court hearing of Starbucks vs. McKinney, which will determine the scope of the National Labor Relations Board’s power in stepping in to resolve labor disputes. Starbucks argued before the Supreme Court against a previous district court order that had ordered the coffee chain to reinstate seven previously fired workers in Memphis, Tenn., who were terminated in 2022 during an attempt to unionize the store.
According to the legal representation for Starbucks, the highest court in the land should reconsider the district court decision in part because the NLRB’s request for a temporary injunction was approved on the grounds of a two-factor test, even though other circuit courts use a more rigorous four-factor test to determine if the injunction will be granted.
Bankruptcy filings, no matter the industry, are the result of a thousand cuts.
This month has produced filings and rumors of more to come in the pandemic-shaken restaurant industry.
Maitland, Fla.-based Tijuana Flats Restaurants filed for Chapter 11 protection in the Florida Middle District Bankruptcy Court after closing a total of 40 restaurants this year, 11 of them last week.
And, while Tijuana Flats is in the fast-casual segment, North Aurora, Ill.-based Oberweis Dairy filed April 12for Chapter 11 bankruptcy reorganization at the 43-unit dairy and retail concept.
And Bloomberg reported April 16 that Orlando, Fla.-based Red Lobster, a stalwart in the casual-dining segment, was talking with experts about a possible bankruptcy filing. The company named Jonathan Tibus, known for his restructuring expertise, as CEO in late March.
Senior editor Ron Ruggless helps us make sense of it all.
Who has power in the restaurant industry? What does power really mean when it relates to one of the largest industries in the country, one that employs more than 12 million Americans this year and will achieve roughly $1 trillion in annual sales?
The answer is always shifting, and Nation’s Restaurant News’ annual Power List has evolved alongside it, recognizing everyone from chief executives to tech entrepreneurs to general managers. This year, though, a clue can be found in the official definition of power: “possession of control, authority, or influence over others,” according to Merriam-Webster.
Influence. With influence comes power, and increasingly a horde of social-media users are gaining power by capturing consumers’ attention and driving their purchasing decisions.
Last week, we talked about the tech takeaways from the Restaurant Leadership Conference. Today, executive editor Alicia Kelso is joining us to talk about her takeaways.
The main takeaway is labor. There was a lot of discussion about labor and wages against the backdrop of California’s AB1228 which went into effect earlier this month, raising the minimum wage to $20 an hour. One operator told Alicia he’ll “never” expand in California again, while another felt confident about the combined pricing and technology strategies her team has put into place to soften the inflationary blow. We’ve seen plenty of stories so far about layoffs and kiosk implementations and even menu adjustments to navigate these higher wages, but time will tell how it ultimately shakes out. Will this $20 watermark trickle beyond QSRs? Likely. Other markets? Maybe. Will California’s restaurant growth stagnate a bit? Perhaps among smaller players, but not likely among the bigger players who have the advantages of scale to absorb the higher costs.
This week, several editors here at Nation’s Restaurant News attended the Restaurant Leadership Conference or RLC in Arizona. The conference gathers top leadership at restaurant companies for discussions, networking, and sessions.
Senior editor Joanna Fantozzi was there are had some key takeaways from the conference.
First, pricing & labor costs. Something we’ve been talking about in the industry for quite a while ranging from digital menu boards to AI technology that can predict future needs to how to maintain fair pricing while also turning a profit.
Second, experience is still key. At casual dining restaurants, there’s a hesitancy to embrace technology out of fear that it would disrupt the hospitality they’ve become known for. How can they balance both? Also, the rise in the new kind of eatertainment brands was a big theme of the conference.
Third, data is a big tech takeaway. We’ve been talking about data collection here for a while but the question of ‘what do I do with his data?’ is still a mystery for many brands, including the top 25.
Menu innovation never stops, but at times of rising costs and diminished labor, finding relatively easy ways to create menu news is especially appealing.
It’s operationally straightforward to swap one sauce for another, but quite impactful in terms of flavor.
Sweet-and-spicy was certainly the flavor combination of last year, and Arby’s, Qdoba, Buffalo Wild Wings, Genghis Grill, Red Lobster, Chester’s Chicken, and Bonchon all added sauces in that category. Twin Peaks added a hot sauce that’s so spicy its name requires an asterisk, while other chains augmented what they already had, such as The Halal Guys and Naf Naf Grill.
McDonald’s, while busily upgrading its burgers, also decided to make its beloved Big Mac sauce available for any menu item.
Dunkin’ found that the Butter Pecan Swirl which was a seasonal syrup that guests could add to their coffee was so popular that they made it a permanent addition to the menu.
Pizza Hut, the division of Yum Brands Inc., is partnering with online influencer Keith Lee for a new benefit pie, the company said Tuesday.
Plano, Texas-based Pizza Hut is teaming with the NAACP Outstanding Social Media Personality winner to support both Lee’s charities as well as promote its “$12 Any” campaign, which allows customers to customize their toppings and crust.
Lee’s community pizza features his family favorite toppings, pepperoni and bacon, on a hand-tossed crust.
Lee is known for his food content pushed to more than 16 million TikTok followers.
As part of this partnership, Pizza Hut and Lee will donate $50,000 to Southfield ANT and OakHills High School, where Keith and his wife, Ronni, attended high school.
Starbucks’ newest dual lineup of beverages takes on the “swicy” trend (that’s “sweet and spicy”) that has been popular with younger generations as of late. On April 14 at Coachella, Starbucks unveiled the new Spicy Lemonade Refreshers in three flavors — pineapple, dragonfruit and strawberry — that are spiced with Starbucks’ proprietary chili powder blend.
These drinks, available at all Starbucks cafes for a limited time starting April 16, join the lineup of “swicy” drinks made with hot honey that were announced last month for Reserve stores in Chicago, New York City, and Seattle. Together, these beverages join the throng of hot honey pepperoni pizzas, sweet chili-flavored Takis, and chili pepper maple syrups that have been popular on menus and in grocery stores over the past year.
Growing taco concept Velvet Taco has big plans for the next few years. Recently, Alicia Kelso went to the chain’s Dallas headquarters to tour the place and, more importantly, try the tacos.
While other brands have simplified and paired down menus, Velvet Taco has become known for expanding its menu. From the brand’s signature tacos like the Chicken Tikka to its weekly taco features, called WTF, the brand is leaning into the fun part of the restaurant industry.
CEO Clay Dover, who has worked at Pei Wei and Raising Cane’s as chief marketing officer, has promised that the chain will be growing soon and has 200 restaurants in the pipeline. Some of those new locations include airports as well as international expansion.
Teens continue to love Chick-fil-A and, as demonstrated by the chain’s recently reported 2023 AUVs — up almost 10% over 2022 — they’re not alone. The semi-annual Piper Sandler survey “Taking Stock with Teens” identified the top five restaurant chains favored by today’s teens, and the results are somewhat surprising.
In addition to Chick-fil-A, which received 16% of the vote, other top choices include McDonald’s (10%), Chipotle (9%), Raising Cane’s (4%), and Texas Roadhouse (4%).
The survey polled 6,020 teens with an average age of 16.1 from 47 states. Of the teens, 38% are employed part-time, and their average household income is $66,280.
Chick-fil-A is a favorite among consumers, and as the chicken segment has been on the rise, the chain has benefited from its success while maintaining its signature service. Last week, Technomic released its report on Chick-fil-A’s 2023 financials, which were up 43% over the chain’s 2018 numbers.
As Panera Bread is in the midst of a major brand transformation, traffic for the St. Louis-based company is up 5.2% year-over-year, according to recent data from Placer.AI — it’s biggest traffic growth spurt in almost a year, since a 10.8% jump last March.
While Panera originally made its mark by offering freshly baked bread and other bakery goods — and later on, used ethical sourcing and “clean” ingredients as an industry differentiator – the fast-casual brand has recently changed its outlook.
As Panera looks to “get back to its roots” ahead of a near-future IPO, the company recently introduced a menu transformation, while allegedly simultaneously axing about 19% of the menu, including flatbreads, grain bowls, select pastry items and cold brews, and more. Additionally, the company has quietly rolled back some of its ethical sourcing practices to allow for “judicious use of antibiotics” and ease supply chain pressures. At the same time, Panera is still grappling with several lawsuits surrounding Panera customers that died allegedly after consuming highly caffeinated lemonade energy drinks.
Texas Roadhouse has been on a roll for the past several years now, churning out record sales and average unit volumes and managing astonishingly high demand as it enters its 12th consecutive year of traffic gains.
Such momentum hasn’t necessarily been the case for many of its casual dining peers in a challenging post-pandemic environment. Many have experienced declining traffic patterns and, in some cases, unit count retrenchment. This divergence pushed Texas Roadhouse past one of its biggest segment competitors in 2023, as the Louisville, Ky.-based chain generated higher sales than Applebee’s for the first time, according to new data from Technomic Ignite.
Texas Roadhouse also snuck up on casual dining leader Olive Garden, though it’s worth mentioning that Olive Garden’s 2023 was certainly remarkable in its own right. The Darden Restaurants’ brand finished 2023 with $5.11 billion in sales, an 8.8% increase over 2022’s $4.69 billion.
Chick-fil-A generated $21.58 billion in sales in 2023, a 14.7% increase over 2022’s $18.81 billion and over 43% over 2021’s $15 billion. According to new data from Technomic Ignite, the chain has essentially doubled its total sales volume since 2018.
In the process, the company has also continued to gain market share in an intensely competitive QSR chicken category.
As Chick-fil-A’s consistent growth remains a major narrative, it’s worth mentioning that its competition extends far beyond the QSR chicken category. Indeed, Kalinowski Equity Research noted all the way back in 2018 that Chick-fil-A’s biggest competitor is McDonald’s and it’s no wonder why the Golden Arches and seemingly every other QSR concept (and beyond) have since ignited a chicken sandwich war replicating the Atlanta-based chain’s signature product.
Fast forward to now and this competitive set remains just as broad. Chick-fil-A released its latest Franchisee Disclosure Document this week, showing that the chain’s average unit volumes for non-mall locations in 2023 reached a record $9.3 million – an 8.1% increase over the previous record, $8.67 million, reached in 2022.
The James Beard Foundation on Wednesday announced the nominees for its Restaurant and Chef Awards.
For decades, we knew what we were getting from the awards: Mostly well-established chefs from fine-dining restaurants in major cities. Yes, they were usually white and male, but arguably more importantly they were largely from the same groups of chefs with well-established networks and hardworking publicists. The same nominees put forward by past winners and a cadre of food writers (including myself until the late 2010s) who didn’t change very often appeared on the ballots every year, minus whoever won the previous year. And when the big-name chefs such as Thomas Keller and the late Charlie Trotter won all the awards they could win, the nominations were passed on to their protégés.
That’s no longer the case.
The Beard Awards were essentially canceled in 2020 and 2021 for obvious reasons, and in the interim the foundation did some serious soul-searching and reworked the criteria of the awards. Now those nominating potential winners must explain how the chefs, restaurants, bartenders, etc., fit into the foundation’s values “centered around creating a more equitable, sustainable, and healthy work culture.”
In light of California’s new $20 minimum wage bill for fast-food workers, which went into effect on April 1, restaurant chains and franchisees are already taking action, in some cases by raising prices by as much as 7-8% for select menu items in the state.
Analysts Eric Gonzalez of Keybanc and Mark Kalinowski scraped data and researched pricing trends over the past couple of months at major restaurant chains to determine how much menu prices have been impacted by surge in labor costs in the state. All eyes are on companies like Chipotle and Starbucks especially, as these brands do not franchise (which is historically an industry anomaly).
According to Kalinowski’s research (which sampled 25 Chipotle restaurants in California), the price of a Chipotle chicken burrito went up 8.3% from February to April, while the cost of a steak burrito increased by 7%. This research is in line with Gonzalez’s analysis, which suggests that pricing at most Chipotle’s 476 stores in California increased by 7-8%. Gonzalez said that Chipotle is actually an unusual case because the company has undervalued its menu prices in the state to compete with the proliferation of other burrito options in California.
ASAP, the food delivery service formerly known as Waitr, has shut down after the company filed for Ch. 7 bankruptcy, according to an 8-K form filed with the U.S. Securities and Exchange Commission on April 2.
Waitr was founded in 2013 as a boutique delivery platform by students at McNeese University and then was officially launched in 2015 before spreading throughout Louisiana and into other regions. In 2018, the company was acquired by Landry’s owner Tilman Fertitta’s blank check company, Landcadia Holdings Inc., for $308 million.
Since then, the company has experienced a series of financial ups and downs as the restaurant industry entered the golden era of food delivery and it was “sink or swim” in the increasingly crowded market. Waitr tried to differentiate itself from competitors like Grubhub and DoorDash by catering toward smaller, independent restaurants in mid-sized cities.
Earlier this month, McDonald’s experienced a systemwide tech outage in several of the company’s global markets, including Australia, the United Kingdom, Japan and Hong Kong. Although the company clarified that the IT outage was not a result of a cybersecurity threat, it took much of the day to fix and get mobile ordering and kiosks back online.
Then, a couple of weeks later, on March 24, Panera Bread also experienced a “massive tech outage” that impacted online ordering, POS systems, and in-store kiosks, as first reported by Silicon Valley Daily, though the company was not as forthcoming as McDonald’s had been about the cause, and Reddit users in the Panera community speculated that it could be a cyberattack of some kind.
Although few details were revealed about either the McDonald’s or Panera outages, the reality is that widespread IT outage can affect operators of any size, and restaurants need to deploy resources from preventing (as much as they can) these issues from happening in the first place.
This year, for the annual Women’s Foodservice Forum Conference, our editors Alicia Kelso, Joanna Fantozzi, and Leigh Anne Zinsmeister traveled out to the Hilton Anatole in Dallas, Texas to meet with the 3,000 attendees at the conference honoring women in the restaurant industry. On the 35th anniversary of the conference, change held a new meaning for conference leaders.
There were keynotes from Luvvie Ajayi Jones, Katty Kay, Cassandra Worthy, and Kendra Scott, as well as networking activities.
At the conference, there were sessions on inclusion, overcoming imposter syndrome, personal branding, boundary setting, communication, and sessions for communities of interest like women of color, LGBTQ, single/working parents.
Ahead, you’ll hear from one of the editors from NRN who attended the conference, Joanna Fantozzi, about her impression of attending for the first time as well as hear what her thoughts are on moving the needle forward for DEI and gender parity at a time when companies are rolling them back or changing language.
KFC announced last week it has achieved gender parity across its global corporate offices, with women now constituting 51% of the company’s restaurant support center team.
According to a press release, KFC has been measuring progress using the McKinsey & Company Inclusion Survey, which tests whether a subset of employees believe they have an equal chance of success within the company. The survey measures the “gender experience gap” to understand the differences in employees’ observed, perceived, and lived experiences.
KFC’s parity milestone comes on the heels of McKinsey’s 2023 Women in the Workplace Report, which shows that for every 100 men promoted from entry-level to managerial positions, just 87 women received similar promotions.
California’s controversial $20 minimum wage for quick-service restaurant workers employed by companies with 60 or more locations is set to finally go into effect on Mon. April 1, after undergoing multiple revisions and pushback from the restaurant industry. Last fall, Gavin Newsom introduced and passed AB 1228, a modified compromise version of the original FAST Act, which increases the minimum wage for fast-food workers from $16 to $20, instead of the originally proposed $22 an hour.
Most recently, the legislation was clarified via assembly bill 610, which carved out some exemptions to the bill, including workers in nontraditional restaurant locations like airports, hotels, event centers, theme parks, and corporate campus cafeterias. Originally, this bill included a carve-out for restaurants that bake their own bread, like Panera, though after pushback, Gov. Newsom was pushed to clarify that Panera would be following the new minimum wage law requirements.
Ahead of April Fool’s Day, chains have been releasing menu items that may be real. This is a tradition in the restaurant industry where brands promote various menu items that seem outlandish in the hopes that they will drive customers to their stores.
As you’ll hear ahead, some of these menu items have been so popular that they’ve joined menus permanently. Others haven’t even existed.
This year in particular, there are a few chains that seem to be embracing pickles which, in light of yesterday’s episode, would seem to be on trend.
Bret Thorn and I discuss food trends in the industry when it comes to beverages and what’s up ahead.
Papa Johns has introduced trendy cup-and-crisp pepperoni to three of its menu items as a limited-time offer, the pizza chain said Monday.
Its new Crispy Cuppy ’Roni is a thicker version of the popular pizza topping with crispy curled edges.
The new topping is available on the NY Style Crispy Cuppy ’Roni Pizza for $13.99, in the Crispy Cuppy ’Roni Papadia folded sandwich for $6.99, and in the miniature Crispy Cuppy ’Roni Papa Bites for $4.99. They’re being offered now to Papa Rewards loyalty program members and to everyone else starting April 1.
Hear more about trends in the pizza segment with senior food and beverage editor Bret Thorn on today's episode of First Bite.
No, you’re not imagining things and there is no need to adjust your TV. There really are more ads and marketing campaigns from restaurant companies on air, on your phones, on your streaming services, on your social media feeds.
An increase in advertising/marketing spend was one of the major themes from this latest round of earnings calls, in fact, and it’s a strategy shared by brands from Brinker to BJs, and from Shake Shack to Dutch Bros. There’s a reason for this (or several). Firstly, we’ve returned to a far more normalized environment after three years of anything but. Second, several brands are growing and therefore cultivating top-of-mind awareness as they enter new markets. Third, consumers are becoming more discerning and pulling back on traffic, and it’s important to keep their attention.
Although the restaurant industry has been experimenting with dynamic pricing for years, public discourse around the topic grew last month with the news that Wendy’s would be testing dynamic pricing in 2025. Though much of the social media buzz can be attributed to the public conflation of dynamic pricing with surge pricing, there is no doubt that variable menu prices — whether they are affected by the time of day, geographic location, or changing consumer needs — are key to restaurant optimization in 2024 and beyond.
New tech capabilities, including AI, will play a crucial role in the rise of dynamic pricing across the industry. For Wendy’s, changeable pricing starts with digital menu boards, which are being rolled out across the company’s portfolio, and includes AI-enabled menu changes that allow restaurants to raise or lower prices in the moment. This type of instant gratification suggestive pricing capability is being tested out by companies like restaurant revenue management platform Juicer, which just announced a new tool that helps restaurants adjust pricing and special offers based on data from local competitors.
Rob Lynch is leaving his role as CEO of Papa Johns to take on the same position at Shake Shack, effective May 20. Lynch succeeds Randy Garutti, who announced his intentions to retire in December after leading the company for more than two decades. Garutti will transition as an advisor in May to ensure a smooth transition.
Lynch was hired at Papa Johns in August 2019 and helped drive record global systemwide sales of over $5 billion at the company. He has also led the company’s growth to approximately 5,900 units.
Earlier this week, after Starbucks’ annual shareholders’ meeting, company investors voted on several initiatives, including a new executive compensation package that would omit diversity and sustainability goals from bonus considerations for top leadership at the company. Shareholders voted overwhelmingly (90% yes votes) to approve the new compensation packages, though the vote is technically nonbinding to company policy.
This bonus initiative was first introduced in 2020 as a company-wide effort to support diversity, equity, and inclusion at Starbucks and was quickly emulated by other major foodservice chains nationally, including Chipotle, which increased the percentage of its executive bonus ties to company ESG goals from 10% to 15% in 2022.
Last year, 7.5% of Starbucks executive bonus consideration was tied to diversity, while 7.5% was based on sustainability goals. In the proposed outline for 2024, 75% of executive bonus consideration would be tied to overall financial performance and 25% would be based on individual performance. Additionally, the company replaced the word “representation” with “talent” in its PRSU (performance-related restricted stock unit grant) program “to include a broader spectrum of the workforce and provide for different representation improvement targets.”
In Sept. 2022, Starbucks officially unveiled its highly anticipated foray into the metaverse: Starbucks Odyssey. At the time, NFTs and the metaverse were the trendy tech innovation of the moment, with businesses across many sectors scrambling to figure out how to cash in on the popularity of Web3, which was promised to be a more immersive “Internet of the Future.” Eighteen months after unveiling Starbucks Odyssey, the Seattle-based coffee company has confirmed that the program — which has been in beta mode for 15 months — will officially end at the end of the month.
While the announcement comes as no surprise — it has been a while since the metaverse and NFTs captivated audiences and motivated tech companies — Starbucks ending Odyssey in its current form signals the closing of a chapter in the history of restaurant technology.
For an emerging brand in hyper-growth mode like Dutch Bros, it can be easy to primarily focus on physical expansion into new markets. But as new Dutch Bros CEO Christine Barone said during Thursday’s J.P. Morgan forum, while the Grants Pass, Ore.-based coffee brand is keeping development front of mind — with Florida as its next target market — she wants to emphasize diverse means of growth.
For Dutch Bros, that means focusing on smart development with fanbase growth in mind, building brand awareness, and give the company’s tech stack a makeover.
A U.S. federal judge in Texas blocked the broadened National Labor Relations Board joint employer rule that was introduced in October and would have made franchisees and franchisors jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more. The rule, which was supposed to have gone into effect Monday, would have revived and updated an Obama-era rule that was limited in scope during the Trump Administration.
In his decision, U.S. District Court Judge J. Campbell Barker called the expanded joint employer rule “arbitrary and capricious,” and said that it would be “contrary to law.”
Taco Bell now seems to be adjusting its strategy for younger consumers. Starting March 21, Taco Bell will offer a new Cantina Chicken Menu.
With this menu launch, the company projects to use more than 2.5 million additional pounds of produce in 2024.
Not only is this new menu aimed at capturing younger consumers’ protein preferences, it was also created to “tackle misconceptions” about only being a late-night brand, the company said. During the company’s recent Live Mas Live event in Las Vegas, CMO Taylor Montgomery said the company is making a play for more lunch/afternoon business.
Last fall, President Biden announced a proposed crackdown on “junk fees” or misleading consumer-facing surcharges that are usually included in the fine print before a purchase is made. The Federal Trade Commission’s proposed trade regulation rule would require businesses to include all required fees in the original listed price. While media attention on this proposed crackdown had initially focused on companies and industries like Ticketmaster, airlines, hotels, and car rental agencies, the FTC rule would also include restaurant service charges in its new rule.
Most recently President Biden mentioned getting rid of junk fees again during the annual presidential State of the Union address last week.
KFC’s newest restaurant in Rome, Italy, marks the company’s 30,000th global location. The company announced the milestone, noting that a new KFC location opens somewhere in the world every 3.5 hours on average.
In 2023, KFC opened nearly 2,7000 restaurants across 96 countries, a 10% development pace and setting a brand development record. More than 80% of unit growth came from 15 publicly traded franchisees. KFC accounts for nearly 50% of parent company Yum Brands’ divisional operating growth.
During Yum’s most recent earnings call last month, executives called out several standout markets for the brand. China, India, Thailand, South Africa, and Spain drove KFC's development during 2023 and were part of a group of 15 countries that grew unit count by more than 25 restaurants. Further, KFC plans to enter its 150th country later this year.
Potbelly just introduced a new six-pack cookie box, available in-store or digitally. In a statement, Potbelly’s CMO David Daniels said, “Our fans have an insatiable love for our cookies and now we’re making it easier for them to enjoy together with others, share as a gift, or save for later.”
In late 2022, Subway also launched six- and 12-pack “Cookie Bundles,” along with the debut of its limited-edition footlong cookie that is now available nationwide.
Meanwhile, KFC recently introduced its new Colonel's Homestyle Brownie, while its sister brand Taco Bell is testing things like Churro Chillers shakes, Baja Blast pie, and the Taco Bell x Salt & Straw Ice Cream Chocolate Taco. Further, Wendy’s just teamed up with Cinnabon to debut a Cinnabon Pull-Apart breakfast offering, Chicken Salad Chick acquired Piece of Cake to sell its signature desserts, and Peter Piper Pizza is adding Buddy V’s Cake Slice and Dippin’ Dots options for guests. Shake Shack is testing desserts at select locations to see if they can boost afternoon traffic and, in Canada, Burger King added new “Blasts,” which are kinda like McFlurrys.
In other words, things seem to be getting a bit sweeter around here.
Noodles & Company CEO Drew Madsen outlined his plan to turn around the fast-casual chain during an earnings call to discuss a punishing fourth quarter for the chain.
Madsen, who had been appointed interim CEO in November following the departure of his predecessor Dave Boennighausen, was named the company’s permanent CEO right before the call.
Total revenue in the quarter ended Jan. 2, 2024, fell by 8.9% to $124.3 million, and same-store sales were down by 4.2%. The company reported a net loss of $6.1 million or 14 cents per share.
Operating margins were down by 50 basis points to 14.7%.
For the year, revenue was down by 1.2% to $503.4 million and same-store sales were down by 1.9%. Noodles booked a net loss of $9.9 million or 21 cents per share.
Central to the plan to turn the brand around is an overhaul of the menu, which Madsen said looks dated, and while it offers familiar and comforting dishes that the chain’s regulars enjoy, “we are not currently a compelling alternative for lapsed guests or new guests.”
For more on what's going on at the restaurant chain, let's turn to senior editor Bret Thorn.
Data collection is more important than ever for restaurant operators, and with so many sources out there — from POS systems to delivery platforms, and from loyalty programs to digital surveys — the potential data mine is infinite. But information collection is not just a numbers game; quality and utility are just as important.
According to the December 2023 Market Leader Report from Nation’s Restaurant News Intelligence, only 21% of operators would rate their data quality as good, while only one-quarter of restaurant operators are confident in their data optimization abilities, revealing the need for more data education.
But just knowing how important data is to the operations of a modern restaurant isn’t enough. Restaurant operators need to build the nuts and bolts of data optimization by asking themselves (and their teams) the right questions.
For more, let's turn to senior technology editor Joanna Fantozzi.
Last week, Panera Bread unveiled its “biggest menu transformation in history,” including nine new items and reimagined recipes and portion sizes, for a total of 20 menu updates. The new menu items include sandwiches like the Toasted Italiano sandwich with Black Forest ham, soppressata and provolone; and salads like the Southwest Chicken Ranch with romaine lettuce, grilled chicken, Ranch dressing, and chipotle aioli. Panera COO Debbie Roberts dubbed the menu overhaul the start of “Panera’s new era” as the company “gets back to [its] roots” in the salad and sandwich categories.
But this brand transformation doesn’t just add new items—it also removes items. Although not included in the original press release, a Panera spokesperson confirmed with NRN that flatbreads would be removed from the menu moving forward. Flatbreads were introduced in 2019 as part of a previous menu overhaul as the JAB Holding-owned company introduced new menu categories specifically designed to target the dinner daypart.
The restaurant business continues to normalize since the Covid-19 pandemic devastated the industry four years ago. But as the bumpiness of the supply chain, staffing levels, permitting delays, and food costs start to smooth out, one major challenge remains: Many employees are not OK.
According to the American Psychological Association, 50% of adults ages 18–34 reported a mental illness in 2023, versus 31% in 2019. That number is likely compounded among restaurant workers, who are most at risk for substance abuse disorders and heavy alcohol use, according to the Substance Abuse and Mental Health Services Association. Overall, foodservice is considered one of the worst industries for mental health, according to a 2017 report from Mental Health America.
After experiencing a historic labor shortage that impacted sales and operations in 2021 and much of 2022, it seems the industry is now doing more than ever to help its people. Prior to the pandemic, employee mental health programs in the industry were quite rare. In the late 2010s, Chipotle and Starbucks became pioneers here, with the former adding access to mental healthcare and the latter providing inpatient and outpatient mental healthcare and mental health training.
Executive editor Alicia Kelso has more.
One of the hottest beverage trends at the moment originated in Utah and spread with the help of social media.
“Dirty soda” is a sparkling beverage with something creamy added to it — often milk or half-and-half, but also non-dairy options such as coconut cream.
In its current form, the menu platform gained traction with the help of Swig, a 63-unit beverage concept based in Lehi, Utah, and now larger chains are getting in on the action — particularly as interest in nonalcoholic beverages takes off.
Dairy added to soda isn’t a new concept. Ice cream sodas and root beer floats have been around for decades, as has the egg cream — an oddly named drink since it has neither egg nor cream — that was once popular in New York City and is made of seltzer with whipped chocolate syrup and milk.
For more on the history of dirty soda, let’s turn to senior food & beverage editor Bret Thorn.
One of the takeaways from Dine Brands’ earnings call Wednesday morning is that its Applebee’s system plans to close 25 to 35 restaurants this year. Dine Brands CEO John Peyton notes that this is not a right-sizing effort but rather a “deliberate effort to allow franchisees to close unprofitable restaurants, where the market may have moved away from them.”
In the late 1980s, Edna Morris was leading human resources at Hardee’s and was asked by a reporter to be interviewed for a story about women in the restaurant industry. The reporter also asked if she knew of any other women who would be willing to go on the record.
The task was more daunting than she expected it would be.
“It was hard. I did find some. They existed, but we didn’t know each other,” Morris said during a recent interview.
So, the group made plans to get together in person in conjunction with the National Restaurant Association in Chicago and have some deeper conversations. That decision likely changed the course for women in the restaurant industry, as their camaraderie and shared experiences drove them to eventually create the Women’s Foodservice Forum.
Cracker Barrel Old Country Store Inc. is continuing to struggle under new leadership, as new CEO Julie Felss Masino talked about a long road ahead to recovery and long-term profitability for the Lebanon, Tenn.-based casual-dining brand. Cracker Barrel reported a 4% decline in traffic and modest same-store restaurant sales growth of 1.2% with a more than 5% decline for retail sales for the second quarter ended Jan. 26, 2024. The second quarter is generally one of the strongest for Cracker Barrel, as it includes the Thanksgiving and holiday seasons.
CAVA is continuing to ride high after its IPO debut in June. The fast-casual restaurant company released its Q4 and fiscal year earnings on Monday and the results bucked the industry trends that have so far emerged during earnings season.
After suffering from delivery stagnation in the post-pandemic era, Domino’s Pizza appears to have finally found its footing again after implementing its multi-pronged “Hungry for More” strategy. The Ann Arbor, Mich.-based pizza chain reported 2.8% U.S. same-store sales growth for the fourth quarter ended Dec. 31, 2023, largely attributable to growth of both its delivery and carryout sectors, though total revenue gains were only modest.
The delivery sales improvement was actually noted before Domino’s began feeling the full effects of the company’s historic partnership with Uber Eats, which was first announced last July.
After the Atlanta-based restaurant company formerly known as Focus Brands announced its rebranding to GoTo Foods on Tuesday during the company’s annual conference in Las Vegas, CEO Jim Holthouser offered some details on exactly what to expect in the days and years ahead.
Although daily operations won’t change much for franchisees and employees as the company moves to a more platform-based business model, more brand collaboration will be on the table.
The goal is to eventually break down most silos between the seven restaurant brands — including Jamba, Cinnabon, Auntie Anne’s and Moe’s Southwest Grill — and commonly share resources, personnel and technology. For example, the company is in the midst of moving all seven brands to a single POS platform, Qu, to promote synchronicity among the brands.
Chefs Jennifer Hwa Dobbertin, Reuben Asaram, and Lawrence Smith have all crafted impressive resumes in their respective hometowns of San Antonio, Philadelphia, and Pheonix. But, as is often the case in the restlessly creative world of culinary, they all want more.
For now, Dobbertin, a repeat 2023 and 2024 James Beard Award semi-finalist, is busy running Best Quality Daughter, which she first opened alongside two friends in 2018 and five years after opening her first brick and mortar concept, Hot Joy. Best Quality Daughter has since become a San Antonio staple featuring Asian-American cuisine with a South Texas influence.
Rueben Asaram, who was trained at the Culinary Institute of America and now owns and operates Reuby in Philadelphia, blends Mexican and Indian flavors. Asaram has a background in fine dining but left to travel as much of the world as he could. The experience inspired him to since create colorful popups throughout his city, which has become his signature.
Lawrence Smith is a bit newer to the scene, working his way from line cook to sous chef to executive pastry chef. In early 2022, he opened Chilte in Phoenix, which he describes as experimental, modernized Mexican cuisine.
This past Valentine’s Day there was a trend among limited-service restaurants. Several high-profile companies turned one or a few units into fine-dining experiences.
Shake Shack launched a pop-up at two Los Angeles restaurants to promote its new Korean-style menu on Valentine’s Day called the “Swicy Date Night Experience” — “swicy” being a combination of sweet and spicy, two common Korean flavors.
In New York City and Los Angeles, Panda Express unveiled its newest menu item, Firecracker Shrimp, via a five-course tasting menu at two select locations of the chain. The menu included an elevated take on Panda Express classics as well as other Chinese American dishes.
And Wingstop, in honor of being named one of the worst date spots, launched its own fine-dining Valentine’s Day experience that included a pairing menu with alcohol and the chain’s famous wings and chicken items.
What do all these activations mean?
Texas Roadhouse CEO Jerry Morgan ended the company’s Q4/full-year earnings call Thursday evening with an enthusiastic “Yeehaw.”
Given the company’s results, this didn’t seem out of place at all. For Q4, the Louisville, Ky.-based casual dining company’s comp sales were up 9.9% at company-owned restaurants and 8.9% at domestic franchise restaurants. Those comp sales were driven by 5.1% traffic growth and a 4.8% growth in average check. By month, comp sales were up 9.2% in October and November, and 11.1% in December.
Restaurant margin dollars increased by 21.4% to $176.7 million versus $145.6 million in the year prior, primarily driven by sales. Restaurant margins were up to 15.3%, or 75 basis points higher year-over-year. The company opened 12 company restaurants and seven franchised restaurants during the quarter.
In 2024, it’s becoming harder than ever to be a successful franchisee. On top of ongoing rising food costs and labor shortages, federal and local legislation is cracking down on businesses while expanding worker rights and protections.
This year, 25 states introduced or will introduce new minimum wages, with six states increasing their minimum wages to either match or surpass $15 (California, Connecticut, Maryland, New Jersey, New York, and Washington state).
On top of ever-increasing minimum wages, the joint employer rule is top of mind for many business owners. The National Labor Relations Board introduced a broadened joint employer in October that would make franchisees and franchisors jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more, reviving an Obama-era rule that was limited in scope during the Trump Administration.
Shake Shack is testing combo meals for the first time at some of its drive-thrus, as well as 8-ounce mini-shakes and sundaes at select restaurant locations, CEO Randy Garutti said during a conference call announcing the chain’s fourth quarter and annual earnings.
Garutti said the limited-service industry has already established that customers like combo meals, such as sandwiches, fries, and a drink, at drive-thrus, and he wanted to try them at his chain while still maintaining the brand’s identity of offering a relatively upscale experience.
Desserts, such as the sundaes that Shake Shack offered before the pandemic and the mini-shakes that it started testing at the beginning of last year, are being tested at select locations to see if they can boost sales and increase afternoon traffic.
Rick Diamond spent most of his career working as an accountant but, like so many others, decided he wanted to be his own boss after Covid hit and started thinking about franchising. Coincidentally, Emily was visiting family in Utah, which gave her the opportunity to visit Crumbl's very first store – a log cabin-like location that opened in Logan, Utah, in 2017.
She loved everything about the concept – the smell, the look, the product. Stores are closed on Sundays, which aligned with their values. They checked out an open location closer to home, in Louisville, Kentucky, and realized it was exactly what they wanted to pursue.
They set up a call with corporate and were approved for a store and, just this week, opened their third Crumbl location in their home market. Their experience with the concept has been “really positive, which is why we went for a third.” Notably, their experience also coincides with the company’s meteoric growth trajectory. Crumbl more than doubled its unit count from 2021 to 2022 and now counts nearly 1,000 shops, while its sales jumped more than 2.5 times to $985 million during that same timeframe.
For a free burger promotion on Monday, February 12, burger chain Carl’s Jr. went big. Like Super Bowl ad big.
The chain ran an ad at the game that was a fighter jet scene reminiscent of the Top Gun films with pilots rushing to get their free burger.
Carl’s Jr. announced it would be giving away free Western Bacon Cheeseburgers to its loyalty program the day after the Super Bowl.
Customers with the Carl’s Jr. app who have joined the My Rewards program received the “Free Burger Day” offer and were able to order it through the app or show the app offer to team members at a restaurant. No purchase is necessary.
The company said the giveaway is part of an effort to distance Carl's Jr. and Hardee's, which had often been marketed together.
Taco Bell held its inaugural Live Más Live event Friday in a popup space on the Las Vegas Strip, harnessing a little extra energy from the city amid its Super Bowl revelry.
We’ve spent a lot of time in recent years talking about chicken. Justifiably so — demand for the protein surpassed beef as younger consumers in particular prefer chicken’s health-halo, versatility, and portability.
But during all of this, a number of chains have been reworking their burgers, pouring time and money into upgrading the sandwiches themselves, as well as the equipment used to make them, ensuring their core products are top of mind for an increasingly sophisticated consumer who still very much loves beef.
Among them is McDonald’s. And when McDonald’s makes adjustments, the industry is wise to pay attention. Other brands sharpening their focus on burgers recently include Red Robin, Jack in the Box, and Mellow Mushroom.
Last month, the U.S. Supreme Court agreed to hear Starbucks’ appeal of one of many labor-related lawsuits filed against the Seattle-based coffee chain. This appeal is Starbucks’ response to an Aug. 2022 U.S. district court decision, which ordered the coffee chain to reinstate seven previously fired workers in Memphis, Tenn., who were terminated earlier that year during an attempt to unionize the store.
Chipotle’s Q4 2023 results far exceeded expectations, as well as the industry at large, with Tuesday’s report showing a same-store sales increase of 8.4%. Revenue increased 15.4% to $2.5 billion, while restaurant level operating margin increased to 25.4%, or about 140 basis points.
The company also opened a record 121 new restaurants during the quarter, 110 of those in the Chipotlane model. The highlight of the company’s report, however, was its transaction gain of 7.4%. This is compared to a 1.6% decline across the limited-service segment in the quarter, according to Placer.ai data, as well as negative traffic recently reported by both Starbucks and McDonald’s.
If this all sounds familiar, it’s because Chipotle reported traffic increases of over 4% in Q3, compared to negative 4.2% industrywide. Notably, Chipotle CEO Brian Niccol said this time around the chain has shown strength across all income cohorts – a different tune than McDonald’s, which reported earlier this week it has experienced negative transactions from lower-income consumers.
The National Restaurant Association released its annual 2024 State of the Industry report, and unsurprisingly, technology is one of the top concerns both for consumers and operators. In fact, according to the report, more than three-quarters of operators believe that technology gives them a competitive edge. But they still believe they have a long way to go, as only 13% of operators said that their restaurant technology is leading-edge. To remedy this gap in technology investment, 60% of operators said they plan to invest in consumer-facing technology in 2024, while just over half plan to invest in kitchen-facing technologies.
McDonald’s reported mixed results from its Q4 and full-year earnings report Monday morning. The company’s quarterly same-store sales, at 3.4%, fell short of expectations and were weighed down by the war in the Middle East.
Domestically, same-store sales were up 4.3%, mostly in line with expectations but well below the company’s performance in its most recent quarters. U.S. same-store sales in Q4 2022 were up over 10%, for instance, while the company is up over 30% versus where it was in 2019. CEO Chris Kempczinski said he expects the rest of this year to play out similarly to Q4, which is “normalized growth.”
In the U.S., McDonald’s is navigating transaction reductions from its lower-income consumers making $45,000 and below. Kempczinski noted that these consumers are likely opting to eat at home as grocery/supermarket inflation has cooled faster than food-away-from-home. The company is focused on re-engaging these customers this year.
A U.S. District Court judge has granted food supplier US Foods default judgment in its July lawsuit against Boston Market for unpaid bills, starting in 2022. Although Judge Manish Shah explained that default judgment is a “harsh sanction,” in this case both the court and plaintiffs had no choice because Boston Market had “intentionally dodged their obligations to the court” in a display of “bad faith to avoid this case.”
Chipotle founder Steve Ells’ semi-automated, plant-based restaurant, Kernel — which raised $36 million in Series A funding last summer — has received some superstar investors and an official opening date. New York Giants quarterback Daniel Jones and Chicago Bears quarterback Justin Fields (the latter is a known strict vegetarian) have received equity stakes in Kernel in exchange for their monetary investments in the budding company, according to The New York Post.
Although the first quarter is usually one of the highest-performing times of the year for Starbucks — including both pumpkin spice and red cup season — Starbucks saw a traffic downturn for the quarter ended Dec. 31, 2023, with North America comparable sales up only 5%, driven mostly by menu price increases.
During the Starbucks earnings call on Tuesday, CEO Laxman Narasimhan pointed to the Israel-Palestine conflict as a source of friction in both the Middle Eastern markets and in the U.S., where there have been calls for boycotts of Starbucks from supporters on both sides of the conflict. Narasimhan also explained that slower spending in China contributed to headwinds for the quarter — an issue that was highlighted by Luckin Coffee overtaking Starbucks as the number one coffee chain in China this November.
As January ends, fourth-quarter earnings for the restaurant industry begin. This quarter laps the last quarter of 2022 where winter storm Elliot ravaged the country with blistering cold and snow. That’s compared to the fourth quarter of 2023 where restaurants were able to celebrate that Christmas landed on a Monday and overall favorable weather through the end of the year.
That means the editors at NRN are anticipating same-store sales increases across many brands though some segments are expected to lag. Mainly casual dining except for Darden, most likely, because of the company’s immense popularity. Five of Darden’s brands landed on our report, America’s Favorite Chains and we expect their earnings to show as much.
Expect the next week to hold some big numbers as Brinker, McDonald’s, Chipotle, and Yum Brands report.
However, investors have said that they expect the consumer to soften in 2024 so this may be the last bit of good news for a while.
New York City mayor Eric Adams announced last week in his annual State of the City address that the city would be creating a watchdog agency to regulate the booming delivery industry. The Department of Sustainable Delivery would be the first of its kind of the nation and would be designated to protect both delivery drivers and consumers.
What makes people really love a restaurant brand? Not just “what brand do they most frequent?” because inevitably the McDonald’s and Starbucks of the world would be at the top of the list purely as the winners of a numbers game. Rather, what makes people put that restaurant at the top of their mental list of favorite places to eat?
According to a new report from Yelp, new restaurant openings surpassed pre-pandemic openings in 2023. This indicates the industry may have made a full recovery nearly four years after mandated closures were put into place to control a then-unknown and quickly spreading virus, which impacted an estimated 110,000 restaurants.
Chipotle is preparing for its busiest time of year – March to May – by targeting 19,000 new hires throughout the next couple of months. To incentivize potential employees, the company has added several new benefits, including the addition of a student loan retirement match program.
Potbelly announced Monday the redesign of its loyalty program, Potbelly Perks, which now emphasizes faster and more custom rewards, and an easier-to-use customer interface.
Pinstripes embarked upon a pre-IPO roadshow in early 2020. We all know what happened then, however. Then Omicron happened. Then the IPO market all but froze last year. Fast forward to 2023, and Banyan entered the conversation and invested $21 million upfront as a “precursor.”
The state of Massachusetts and Grubhub have reached a settlement in the state attorney general’s 2021 lawsuit against the third-party delivery company for repeatedly violating the Massachusetts pandemic-era delivery fee caps.
Not even a month into 2024 and it’s safe to say Dutch Bros has had a busy year thus far. As the calendar turned, Christine Barone officially took over the CEO role after serving as president for a little over a year. The company shared development guidance, aiming for 150 to 165 new units this year, including its initial entry into Florida in Q1. The long-term growth target is about 4,000 locations.
As voice AI and robotics technology becomes more intelligent and widely-used, one of the more common user-end complaints is that the technology is not quite sophisticated enough to handle interactions as perfectly as a human might. For example, Presto Voice AI company recently published an article detailing its “Human in the Loop” approach to voice AI: people that are able to take over if and when AI is unable to understand a human—which Presto says it does not have to do 85% of the time.
Not only are robots and AI becoming more adept at understanding human guests, they are also becoming more conversational. Vox AI is (yet another) voice AI company that is looking to revolutionize the drive-thru and the company differentiates itself by claiming to be the most intelligent and conversational voice AI on the market now. RichTech Robotics — known for its robotic barista/bartender, ADAM — announced similar updates to the drink-making robot, which makes him more conversational than previous iterations.
In other news this month, POS integration platform Chowly acquired digital marketing platform Targetable, and PathSpot introduced a new platform that targets food safety.
The ICR Conference, the food and retail industry's investor event, occurred earlier this month with many public companies presenting key findings and future plans.
Executive editor Alicia Kelso attended the conference and was able to speak with executives. Many of those conversations will appear on our website in the upcoming days and weeks.
Today, she spoke with First Bite about what she learned from the 2024 conference and how Papa Johns stood out to her among the crowded rooms.
Many Americans participate in Dry January. Estimates of how many U.S. drinkers forego alcohol for the month range from 15% to 35%.
And although many of you would probably prefer that Americans take a break from drinking during busier months, Dry January doesn't have to mean weak drink sales.
There are now many socially acceptable options for non-drinkers that also are profitable for restaurateurs. Non-alcoholic beer is part of the regular inventory of many restaurants and bars and, according to an October report in The Wall Street Journal citing Euromonitor data, accounted for 0.9% of beer sales by volume as of September 2023. In Western Europe it accounts for 5.8% of total beer consumption.
There’s also an abundance of alcohol-free wine and zero-proof substitutes for hard liquor. And bartenders are getting better at making spirit-free cocktails.
For more on how to make the most of dry January in your restaurant, here's senior food & beverage editor Bret Thorn.
On Jan. 9, the U.S. Department of Labor announced a final rule on classifying workers as employees or independent contractors. Although the new six-factor guide is meant to help clarify and, in many cases, tighten standards around misclassification of workers, third-party delivery companies are confident that it is business as usual for delivery workers.
As the legal landscape around third-party delivery workers begins to shift substantially through local legislation — including a new New York City minimum wage law for contractors that work for delivery apps — on a federal level, standards might not change much for these same delivery app workers.
The final rule, which goes into effect on March 11, 2024, reinterprets the 1938 Fair Labor Standards Act and negates the effects of the Independent Contractor Status Under the Fair Labor Standards Act, which was passed during the Trump administration.
For Domino’s Pizza, everything is on the table in 2024 and 2025: From relaunching loyalty programs to boost traffic, and trying out promotions that garner more buzz and traffic than sales, to fully embracing the new Uber partnership and looking to expand to more delivery platforms in the future. On Monday at the ICR conference in Orlando, Domino’s CEO Russell Weiner and CFO Sandeep Reddy broke down the company’s new “Hungry for More” strategy, which was just announced last month and included the launch of a proprietary operating system.
The appropriately named 2024 strategy has Domino’s saying “yes, more” to everything, including loyalty participation, pizza delivery options, tech innovation, and marketing innovations like the emergency pizza promotion, which is an upgraded “Buy one get one free promotion” that lets customers buy a pizza and get a promotion for another free pizza to use at a later date.
Desserts can be a tricky sell. Guests love them and they’re highly profitable, but it’s not always easy to convince customers to invest in the extra time, money, or calories.
One option is to make them drinkable.
Beverage consumption in general is surging as consumers turn to menu items that are fast, portable, customizable, and satisfying, especially in the growing afternoon daypart. Restaurant companies large and small have noticed, and are responding with an array of drinkable desserts.
Whether they’re milkshakes, dessert cocktails, coffee slushes or other options, these sweet, fun, and often textured drinks are striking a chord with guests.
While restaurants have been selling their products in supermarkets and convenience stores for decades — from frozen White Castle sliders to TGI Fridays mozzarella sticks — recently, foodservice CPG has entered a new social media-conscious era.
Recently, Starbucks collaborated with Stanley (the makers of the uber-popular insulated tumbler) to sell a $49.95 “Winter Pink” 40-ounce Starbucks cobranded cup, available exclusively at Target on Jan. 3 to celebrate the new Starbucks winter menu. Collaborating with multiple trendy brands to market a limited-edition item to the core Gen. Z demographic was a recipe for virality: Long lines of customers waited outside of Target before dawn to grab their tumblers (limited to a few dozen per Target location), and the coveted cups are already reselling for $350 on eBay.
Two major California Pizza Hut franchisees — PacPizza and Southern California Pizza Company — are laying off more than 1,200 delivery workers ahead of the new statewide minimum wage hike for fast food workers, from $16 an hour to $20 an hour, starting April 1.
The two companies — which together own hundreds of Pizza Hut restaurants in Orange, Los Angeles, Riverside, San Bernardino and Ventura counties — are eliminating the delivery driver position as the layoffs become official in February, according to federal WARN Act notices filed last month with the Employment Development Department.
Undeniably one of the biggest trends of 2023 was restaurant brands leveraging influencers on social media to sell their products. These influencers resonate with the coveted Gen Z demographic and help position brands top of mind, even if just for a fleeting moment. And apparently they’re very effective at convincing others to try a menu item. Consider Chipotle’s fajita quesadilla campaign with TikTok influencers Alexis Frost and Keith Lee, for example. The 2023 promotion helped generate two of the company’s top digital sales days of all time.
Influencer marketing is certainly nothing new, but it is reaching a fever pitch and, in fact, the industry has increased by nearly $20 billion in the past seven years. Restaurants in particular are well positioned to capitalize on this trend. According to CreatorIQ, more than 437,000 creators posted about food and beverage brands more than 1.2 million times, driving nearly 75.5 billion impressions, 3 billion engagements and a whopping $4.8 billion in earned media value (EMV). And those numbers are just from the first half of 2023.
Consumers said they were going to dine out during the holidays, and recently released data indicates they did just that.
A National Restaurant Association survey from early December showed that 63% of adults planned to eat out during the subsequent weeks, while 48% planned to order takeout or delivery. As such, after experiencing a dip in traffic through much of September and part of October, business appears to have picked up in early November and continued through the end of the year. Master Card Spending Pulse data shows that restaurant sales were up 7.8% from Nov. 1 through Dec. 24 versus the same period last year – the highest gain among all sectors, and by far. By comparison, retail sales increased 3.1% year-over-year.
Further, Technomic Ignite’s Tindex indicates industry sales were up nearly 10% in November 2023 versus November 2019. Of course, a good chunk of this increase comes from elevated pricing, but it indicates consumers are still very much willing to pay those higher menu costs. Notably, wage growth has outpaced inflation growth.
One week after the release of the third-party assessment of Starbucks’ collective bargaining commitments in December 2023, the Strategic Organizing Center — a coalition of labor unions provoking a proxy battle with the Starbucks executive board — responded. According to the SOC, the results of the independent audit very clearly show a “track record of human capital mismanagement” and that leadership change is needed to facilitate more constructive outcomes for labor-related discussions and agreements.
With its nomination of three directors to the Starbucks executive board, the Strategic Organizing Center hopes to address the company’s treatment of its employees, including Starbucks’ clashes with its growing union, arguing that the company’s alleged union-busting tactics have led it legally vulnerable and have tarnished the goodwill of the Starbucks brand.
4 predictions from senior food & beverage editor Bret Thorn:
Indian cuisine, finally
Trend watchers have been waiting for Indian cuisine to really take off in American dining for decades, and it seems to finally be happening. Medium- to high-end independent Indian restaurants are opening across the country, some led by big-name restaurateurs including Maneet Chauhan in Nashville, Rohini Dey in Chicago, and Srijith Gopinathan in San Francisco, and others by operators still developing names for themselves. Then there’s the growing roster of fast-casual Indian restaurants including Rasa, Curry Up Now, The Kati Roll Company, Tarka Indian Kitchen, Inday, Choolaah Indian BBQ, Tulsi Indian Eatery, and many more. Also of note is the addition this past August of a Zingers Tikka Wrap on the permanent menu of Miller’s Ale House, a casual-dining chain not known for its adventuresome cuisine.
The Zingers is what Miller’s calls its signature chicken tender, but in this case, it’s wrapped up to resemble a kathi roll.
Coffee as the base for spirit-free cocktails
Consumption of coffee is on the rise, as are energy drinks and non-alcoholic cocktails. Young consumers, dating back to when Generation X was young, have long enjoyed energy drinks — often Red Bull — spiked with alcohol. And what has arguably been the trendiest cocktail over the past few years? The Espresso Martini.
Put all of that together, and the stage is set for a proliferation of coffee standing in as the base for spirit-free Old Fashioneds and espressos and tonic. Versions of those drinks are already available at some coffeehouses, notably Everyman Espresso in New York City and Paper Plane Coffee Co. in Montclair, N.J.
That’s already a lot of factors pointing to a beverage trend in the making, but there’s another one, too: Cold brew coffee, the increasingly popular version of America’s favorite pick-me-up, is getting better. Some coffee aficionados have long said cold brew doesn’t extract the unique flavors of high-end beans, but new technology from companies such as BKON, based in Morriston, N.J., have developed technology to extract those flavors. That allows coffeehouses to develop cold brew concentrates unique to their brand, and also makes premium coffee available to bars that might not want to make their own.
White lamb
There’s a fairly new breed of sheep arriving in the U.S. from Australia. The Australian White Sheep has hair instead of wool, giving it a somewhat milder flavor because it doesn’t taste of lanolin from the wool, a plus for people who find lamb to be gamy. But it still tastes very much like lamb. It also has a lot of intramuscular fat, but unlike wagyu beef, which also has a lot of marbling, the meat is nonetheless firm. However, the fat has a lower melting point than traditional lamb, resulting in less of a greasy feel, and arguably a better nutrition profile since it contains less saturated fat. Also unlike wagyu, Australian White Sheep is all grass-fed.
It's likely to sell at around a 10-15% premium to conventional lamb.
Ammonium chloride
Residents of the Nordic countries — Denmark, Finland, Iceland, Norway, and Sweden — have long enjoyed salmiak, a salty licorice that gets part of its distinctive flavor from ammonium chloride.
Also called salmiak salt, Ammonium Chloride is a slightly toxic substance that researchers from the University of Southern California and the University of Colorado recently discovered might trigger a unique taste all its own, apart from the five senses of sweet, sour, salty, bitter, and umami.
What does it taste like? Well, Andrew Richdale, writing in Saveur magazine in 2017 and recently cited by bigthink.com, said it “felt simultaneously fascinating and … abusive? Or at least odd like a knocked funny bone.”
Others say it tastes bitter, salty, and a little sour, with hints of window cleaner.
Given Gen Z’s penchant for trying new things, and their pleasure in consuming energy drinks that some of their elders (I, for one) have described as tasting like sweetened battery acid, and you have the potential for a whole new polarizing flavor profile.
It looks like SHŌ — the NFT-backed restaurant/club in San Francisco that was supposed to open this fall as a two-story “culinary entertainment and nightlife experience” operated under SHŌ Group — is never going to happen. After Nation’s Restaurant News previously reported on apparent construction delays on the project following a groundbreaking ceremony in Aug. 2022, amid lower than anticipated response to NFT membership sales, the project will not be completed.
“We have reached the difficult conclusion that bringing SHŌ to life atop Salesforce Park is not possible at this time,” Josh Sigel, CEO of SHŌ Group said in a statement published by Eater.
According to Eater, the Transbay Joint Powers Authority, which oversees Salesforce Park, where the NFT restaurant was supposed to be located, terminated its lease in July. SHŌ Group did not respond to requests for further comment.
SHŌ was first announced in June 2022 during the NFT craze, when many operators thought that pricey crypto-backed digital memberships would be the future of exclusive dining clubs for an elite customer base.
For more on SHŌ’s demise and the NFT craze as a whole, we go to senior editor Joanna Fantozzi.
Loyalty programs and restaurant apps aren’t just for limited-service restaurants that are visited as frequently as a morning coffee run or drive-thru stop. Baltimore-based Atlas Restaurant Group — which just launched its app and loyalty program this summer — believes that digital investments like rewards, guest data, and subscription perks can be just as useful for fine-dining restaurants.
Atlas Restaurant Group’s in-app loyalty program went live this August. The app allows customers to search for nearby Atlas restaurants, filter by cuisine, make reservations, order for pickup and delivery, and keep track of reward points, which are earned every time they eat at any Atlas property in a simple dollars to points structure. In return for racking up points, guests will receive coupons for discounts, birthday perks, and more.
As the line between fast-casual and casual-dining continues to blur, Smashburger is hopping on the more upscale, experiential trend within the limited-service category. Recently, somewhat in defiance of the off-premises focus of the COVID-era restaurant, Denver-based fast-casual burger chain, Smashburger, has been trying to get guests to linger longer instead of grabbing their food at a pickup window or multi-lane drive-thru.
Over the past few years, Smashburger has elevated its brand with new digital-first prototypes that focus just as much on technology as they do aesthetics. The new prototypes, which began rolling out in 2021, feature open concept kitchens so that customers can see their burger being smashed and milkshake being made in a sort-of “culinary theater” experience.
Dave & Buster’s Entertainment, Inc. is struggling to boost customer visits following a post-pandemic spike in traffic, as same-store sales for the second quarter ended July 30, 2023 were down 6.3%. The dwindling traffic and sales were driven in no small part by challenging macroeconomic circumstances, Dave & Buster’s leadership said during Wednesday’s Q2 earnings call.
Dave & Buster’s CEO Chris Morris said that even though the leadership team analyzed its business to figure out where the same-store sales decline was coming from, they came to no meaningful conclusion, other than a shift in consumer behavior.
The pandemic-inspired three-year federal pause on student loan payments and interest is ending, impacting about 44 million borrowers. Interest on those loans started accruing again last week, while actual payments will resume Oct. 1.
What does this mean for restaurants? Many of their customers will have less money to spend on things like add-ons, fancy drinks, impulse buys, or night-out splurges in general. The average federal loan debt is about $37,000 per borrower, or about $1.59 trillion in total. According to U.S. News, that translates to an average student loan payment of about $300 per month.
That’s a big enough chunk of change to facilitate a major shift for some consumers who have so far shown a strong willingness to accept higher menu prices implemented to manage inflationary pressures. Consumer spending in July was at the highest level in six months, for instance, to the benefit of goods and services.
Two locations of Good Karma Café in Philadelphia have collected enough employee signatures to trigger a vote with the National Labor Relations Board to decertify the stores’ unionization with Workers United on Sept. 7.
A decertification petition is filed when at least 30% of workers at a unionized business wish to no longer be represented by their union. According to the National Labor Relations Act, workers have to wait at least one year under a union before starting the decertification process.
Four Philadelphia locations of Good Karma Café have been unionized since last year, and if workers voted yes to decertify the union election, the stores would no longer be represented by Workers United, the union that also represents 340+ Starbucks stores. Employees that led the campaign to decertify are being represented by the National Right to Work Foundation legal defense, which states that Pennsylvania lacks Right to Work protections for private center employees. As a result, employees at these unionized Good Karma stores are required to join the union and pay dues, even if they don’t want to be represented, as union laws vary state by state.
O’Charley’s — the Nashville, Tenn.-based casual-dining restaurant and bar chain — made the difficult decision last month to close 18 restaurants, or just around 17% of its total portfolio. The 50-year-old chain decided to prune lower-performing stores as a result of the challenging post-COVID inflationary environment, particularly commodities inflation, which led to compressed margins.
Ultimately, O’Charley’s CEO Craig Barber told Nation’s Restaurant News, the difficult decision came down to preserving cash flow, and being able to start the brand anew with a more asset-light portfolio.
Senior editor Joanna Fantozzi, who met with Barber, recapped that conversation for the podcast.
Episode description:
TK writer talks about tk in the industry.
Key take-aways:
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Links
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During a conversation with Smalls Sliders CEO Maria Rivera earlier this year, executive editor Alicia Kelso noted that she said she believes that “modular is the future.”
Indeed, the reason her company is targeting ambitious growth is because it’s leveraging 800-square-foot modular shipping container units manufactured elsewhere and then shipped to their location. Once a plot is prepared, Smalls can open a restaurant on top of it in as little as eight weeks. It takes less than a half hour to get the restaurant from the truck to being fully built.
Speed-to-market is an attractive benefit to modular development, especially given construction and permitting delays hindering much of the industry. Sticky Bird President Brandon Howard said his company’s recently opened modular location in Wichita, Kansas – through a partnership with Lange company’s ModuAll – allowed his team to move quickly and bring the product to a new city faster.
Panera Bread is testing out a streamlined menu with fewer menu items in a “small amount of Panera bakeries” in order to improve convenience for customers and simplify operations for employees, a representative for Panera confirmed to Nation’s Restaurant News via email.
Although the company would not go much further into detail, news of the streamlined menu first reached the public ear via a viral TikTok which has since been made private — allegedly from a Panera employee who claimed approximately 30 menu items were getting the axe from Panera cafes. The TikTok user alleges that items soon to disappear from the Panera menu include the Bistro French Onion Soup, Ten Vegetable Soup, all cold brew drinks, all grain bowls, and several bakery items, including the blueberry scone, butter croissant, and kitchen sink cookie.
As a new generation of emerging restaurant concepts starts to raise capital and scale operations, franchising often seems like the next logical step. But deciding to franchise is about more than just filing some paperwork and waiting for the applications (and added revenue) to come in.
Here are some tips, tricks, and real-life anecdotes from emerging franchisors and experts in the industry.
How long have we been talking about a looming recession at this point? Eight months? A year? Senior food and beverage editor Bret Thorn certainly started bracing for one when banks started failing in March, but the economy actually seems to be chugging along pretty well.
It’s not doing awesomely, mind you. With Q2 earnings season well underway it’s clear that April-June was a mixed bag. Traffic is declining at many restaurants as consumers are apparently fed up with rising menu prices. But many economists seem to think that we’re not going to dip into a recession in 2023. Maybe next year, but who knows?
However, restaurant goers, particularly lower-income ones, are acting a bit recessiony, which means they’re responding more to “value pricing,” but less intuitively it also means that they’re interested in beef.
Subway restaurants said it has entered into an agreement to sell to private-equity firm Roark Capital Group, moving the franchisor into new ownership for the first time since its founding 58 years ago.
Subway, which has headquarters in both Milford, Conn., and Miami, said, “The transaction is a major milestone in Subway’s multi-year transformation journey, combining Subway’s global presence and brand strength with Roark’s deep expertise in restaurant and franchise business models.”
Price of the deal was not disclosed, but the Wall Street Journal reported earlier that it was about $9.6 billion and other sources has said it includes an earn-out provision. The deal is subject to regulatory and other conditions.
Like the breakfast and late-night dayparts, catering took a huge hit from the pandemic. But as events swing back into full gear and businesses attempt to woo employees back to the office via food, catering seems to be experiencing quite a comeback.
To be sure, catering has been on a recovery path for several quarters now, but the channel was a much bigger part of the conversation during the most recent quarter, as indicated by several public restaurant companies.
Consider Red Robin. The company is in the early innings of a five-point “North Star” turnaround strategy, focused on things like elevating the guest experience and removing costs and complexities. Catering is also a piece of that turnaround puzzle. CFO Todd Wilson called it a “bright spot” in the company’s off-premises business.
Food journalist and former New York Times dining columnist Mark Bittman said in a recent interview with The Guardian that he wants to start a chain of nonprofit restaurants and has been pitching the idea — called Community Kitchen — to potential investors. Bittman has touted the (for now) menu-free concept as an idea that would prioritize promoting regenerative agriculture, paying workers fairly, and offering food on a sliding-scale price structure over profit.
While in the interview, Bittman seemed to want to change the world through this business model, and be “really disruptive, really revolutionary, really radical” to address current issues in the global food system, he is hardly the first entrepreneur to tread these waters.
Taco Bell recently unveiled a 2.0 version of its digital-forward Go Mobile restaurant, about three years after the initial concept was introduced in the throes of the pandemic. The updated asset will play a big role as the chain targets 10,000 units “in the coming years,” and will also support parent company Yum Brands’ goal of reaching 100% in digital sales transactions.
Elements of this design – including a walk-up window and dedicated parking for digital and third-party orders and grab-and-go shelves – will be incorporated into future builds. Notably, Go Mobile 2.0 comes as Yum’s digital sales exceed 45%.
Still, it’s important to note this iteration is about much more than just supporting the digital customer. Scott Mezvinsky, managing director, North America, Taco Bell, said the model should also boost franchisee profitability and alleviate employee “pinch points,” especially during the rapidly returning late-night daypart.
Here with more is executive editor Alicia Kelso.
Barbie hasn’t just been a hit at the box office, several restaurant concepts big and small have also gained momentum from tapping into the cultural phenomenon.
Cold Stone Creamery, for instance, is offering an All That Glitters is Pink flavor, with pink cotton candy ice cream, graham cracker crust, dance party sprinkles and whipped topping, while Pinkberry launched a Barbie Land Berry Pink Swirl, featuring dragon fruit and strawberry flavors and topped with “dream sprinkles.” The Barbie Frappuccino – a secret menu item at Starbucks – proliferated on social media shortly before the movie’s release.
Independents have also jumped into the moment.
Adding to a growing pile of legal and financial woes for the Boston Market corporation, the New Jersey Department of Labor ordered the shutdown of 27 Boston Market locations across the state for multiple instances of labor violations and fined the restaurant company nearly $2.6 million, according to a state department press release issued on Aug. 15.
After an investigation, the New Jersey Department of Labor found that the company owed $607,000 in back wages to 314 workers across the 27 locations in New Jersey, and violations included unpaid/late payment of wages, hindrance of the investigation, failure to pay minimum wage, records violations, failure to pay earned sick leave, and failure to maintain records for earned sick leave.
If you’re wondering whether there is demand for Cava after its impressive June IPO, look no further than its first earnings report Tuesday after market. In summation, the Mediterranean concept experienced year-over-year revenue growth above 62% in Q2, driven by same-store sales growth exceeding 18%. Traffic was up by 10.3%.
In Q2, the company opened 16 net new restaurants and ended the quarter with 279 restaurants, a 43.1% increase year-over-year. The company is rapidly planting its flag in new markets, including Missouri and Rhode Island in Q2, and expects 65 to 70 net new units this year, with at least 15% growth in 2024 and 2025. Next year, the first Cava will open in Chicago, establishing the brand in the Upper Midwest.
Domino’s has implemented national discounting before in response to macroeconomic consumer trends, but recently the restaurant has focused on everyday value.
Domino’s Pizza announced Monday the return of the 50% off back-to-school deal on all pizzas, now through Aug. 20. Although Domino’s offers half-off deals throughout the year, this appears to be the first time the Ann Arbor, Mich.-based pizza restaurant chain has brought back this popular discount during back-to-school time since 2019.
These half-off Domino’s Pizza deals, colloquially known as “boost weeks,” were a regular occurrence through 2019 and then took a hiatus during the pandemic before returning last year. This is the second 50% off week Domino’s has introduced in 2023 (the last was in June) and is notably only available through the company’s official channels and not its new partnership with Uber. This falls in line with Domino’s recent promise that the best deals and discounts will still be available through Domino’s direct ordering channels, not through its newfound third-party delivery partnership.
Before Boston Market was sold to Engage Brands under the Rohan Group of Companies in 2020, the American rotisserie chicken chain was undergoing a brand transformation that was supposed to breathe new life into the struggling Colorado-based restaurant company. But now, four years later, Boston Market’s Denver headquarters have been seized by local authorities and many of the company’s locations are closing, have been abandoned, or have been forced to stock their stores with supermarket food as vendor contracts run out.
As of August 2023, Boston Market is staring down a growing pile of lawsuits from unpaid vendors and former employees. According to comments from both current and former Boston Market executives, the new owner has “run the business into the ground,” and it’s only a matter of time before the chain dies out completely.
How did Boston Market get to this point?
Senior editor Joanna Fantozzi digs in.
Every year, Nation’s Restaurant News and Datassential partner to present The Top 500, the definitive sales ranking of restaurants in America.
We also look at unit and estimated sales per unit (ESPU) data in this report.
Three of the restaurants with the fastest-growing ESPUs in 2022 were also amongthe 10 biggest brands by this metric, but many chains grew without hitting the very top rankings. The highest ESPU among the bunch is $12.1 million, and the lowest is $1.2 million — showing that a chain of truly any size or type can achieve huge growth on the unit level.
Meanwhile, in 2022, the ten restaurant chains with the highest ESPU in the U.S. also all saw year-over-year growth — two grew ESPU by more than 51%, but each grew by at least 1.9% and had ESPU of at least $8.1 million.
Managing editor Leigh Anne Zinsmeister breaks down the data.
McDonald’s this week announced its new “As Featured In” Meal.
The meal includes a choice of 10-piece Chicken McNuggets, Quarter Pounder with Cheese or Big Mac, along with fries, a medium soft drink and a newly branded sweet ‘n sour sauce. In other words, it features a collection of menu items that have made appearances throughout film, television and music. The sauce is inspired by McDonald’s “next as featured in moment,” which is with Marvel Studios’ “Loki” season 2, streaming Oct. 6 on Disney+.
The meal will be available starting Aug. 14 in more than 100 countries and the launch will include exclusive experiences for fans, custom merch and more. For the merch, McDonald’s is partnering with Palace, a London-based skate and streetwear brand that has featured McDonald’s in its skate videos. The Palace McDonald’s merch line is available to those who buy an As Featured In Meal and scan the code on the packaging. Also, on Aug. 18, Palace will take over the first McDonald’s restaurant in the U.S., in Downey, Calif., with a popup fashion experience.
Here with more is NRN's executive editor Alicia Kelso.
Wendy’s reported Q2 results Wednesday, including systemwide sales growth of 6.9% led by a 12.7% increase in the company’s international business. In the U.S., systemwide sales were up 6.1%, while domestic same-store sales were up 5.1% on the quarter.
No surprise, both the morning and late-night dayparts were in the spotlight during the call, as they were during the company’s last earnings call in May. On the breakfast side, Penegor said Wendy’s experienced the highest quarterly breakfast sales volumes of all time, supported by its $3 croissant promotion launched in late March. The daypart experienced mid-single-digit sales growth and the company expects this momentum to continue with its new Frosty Cream Cold Brew and “additional menu innovations launching soon.” Rumors have swirled that those innovations could include a pumpkin spice-flavored lineup. Penegor is bullish about the breakfast daypart throughout the rest of this year because of these innovations, as well as more consistent promotional activity aimed at driving trial and repeat visits.
Bookending that breakfast business is Wendy’s late-night daypart. The company recently began advertising its late-night offerings for the first time in four years and 90% of its restaurants are now open until at least midnight. The daypart experienced double-digit sales growth last quarter.
The week after YouTuber MrBeast, aka Jimmy Donaldson, filed a lawsuit against MrBeast Burger parent company, Virtual Dining Concepts, for harm to his brand, Virtual Dining Concepts is now filing a countersuit. While the original lawsuit against VDC claims that the poor quality of MrBeast Burger has done “material, irreplaceable harm” to his brand, Virtual Dining Concepts’ countersuit claims that Donaldson has failed to honor his contractual obligations with the company and is interfering with the business dealings between VDC and MrBeast Burger.
While MrBeast Burger is one of the most recognizable and lucrative virtual restaurant brands currently on the market, the brand has received mixed reviews. According to Donaldson’s original lawsuit against Virtual Dining Concepts, the food is often delivered in unmarked and unbranded packaging and has been described by some reviewers as “disgusting,” “inedible,” and “the worst burger I ever had.”
Boba has been an increasingly popular ingredient in iced tea and related beverages in the U.S. for close to a decade. The tapioca pearls usually the size of small marbles are plopped into beverages and then drunk through an oversized straw, providing a chewy textural treat that is particularly popular among young people. But boba is now being accompanied by related items such as popping bubbles, wiggly jellies, and pudding to add extra fun, different flavors, and increasingly important visual appeal.
Boba tea-focused chains such as Kung Fu Tea and Gong Cha continue to add variety to their offerings.
Papa Johns International, Inc. continues to struggle during what the company called a “challenging operational environment” as same-store sales drooped 1% during the second quarter ended June 25. According to Papa Johns CEO Rob Lynch, April 2023 was the worst month of same-store sales since he joined the company in August 2019, attributable to low-performing franchisee stores, which lagged behind company-owned store performance.
Besides making sure that franchisees do not run away with menu price increases, Papa Johns’ growth strategy moving forward is rooted in improved digital marketing and continued menu innovation. This quarter, Papa Johns introduced the Doritos Cool Ranch Papadia, which “generated a significant amount of buzz” on their digital channels and drove engagement. Most recently, Papa Johns introduced garlic stuffed-crust pizza at the start of the third quarter, and will be soon introducing a spicy garlic stuffed-crust pizza to “keep the momentum going.”
It was a good quarter for Shake Shack, with record sales of $426.3 million, up by 21.2% compared to the second quarter of 2022. Same-store sales were up by 3%, with restaurant-level margins of 21.2%, the first time margins were above 20% since 2019.
Net income turned positive to $7.2 million, or 16 cents per share.
In the previous quarter it reported a net loss of $1.5 million, or 4 cents per share.
Much of the success was due to the implementation of operational efficiencies and the continued rollout of kiosks in restaurants, which generate higher average checks and require less labor.
Throughout the past several quarters, Taco Bell has hogged the spotlight for Yum Brands’ earnings results. That spotlight in Q2, however, belonged to KFC.
Yum today reported a 9% increase in same-store sales on the quarter – nearly 2% higher than analysts’ expectations. Global sales jumped 13%, with KFC up 19%, and both Taco Bell and Pizza Hut up 7%. Comp sales increased 13% at KFC, 4% at Taco Bell, and 4% at Pizza Hut. Habit Burger Grill, the newest and smallest chain in the company’s portfolio, increased system sales by 9% with flat same-store sales.
Much of KFC’s performance came from a recovering China business, though the U.S. market was up 5% driven by “a combination of product innovation and always-on value strategy,” CEO David Gibbs said during the earnings call Wednesday morning. KFC’s nuggets launch in late March generated transaction growth, with 100 million sold in the first eight weeks. Gibbs said the product also appealed to younger and new customers and built upon an already established sales layer from the chain’s sandwich launch in 2021.
After announcing in June that he was “moving on from MrBeast Burger” in a series of now-deleted tweets, YouTuber Jimmy Donaldson is suing his virtual restaurant parent company, Virtual Dining Concepts for “material, irreparable harm” to his brand and reputation.
According to the lawsuit filed Monday with the United States District Court of the Southern District of New York, when Donaldson signed on with Orlando, Fla.-based ghost kitchen company, Virtual Dining Concepts in 2020 to launch his virtual burger brand, the company began focusing on rapid expansion and pitching the same business model to other celebrities instead of quality control.
Although MrBeast Burger is one of the largest and most recognizable virtual restaurant brands to come out of the pandemic, the lawsuit takes issue with the low-quality food — often delivered in unmarked and unbranded packaging — described by reviewers as “disgusting,” “inedible,” and “the worst burger I ever had.”
New data from Alignable shows that 36% of independent restaurant operators couldn’t pay their rent in July, a material improvement from 45% who reported delinquencies in June.
July was the second lowest month for rent delinquencies in the independent restaurant sector this year, behind March, which was at 34%. May’s delinquencies were 44%, April’s were 49%, February’s were 40% and January’s were 38%. Rent delinquencies for the sector were a staggering 52% in December, illustrating the past six months have been all over the map for independent operators, who continue to grapple with higher rent prices overall, as well as higher interest rates and slowing traffic.
McDonald’s has spent the past several years retrenching, closing underperforming restaurants and getting its system in order. Ten years ago, for instance, there were over about 500 more domestic locations than there are now.
But toward the end of last year, McDonald’s U.S. started to grow again. CEO Chris Kempczinski noted during the company’s Q2 earnings call Thursday that it has “earned that right” because of strong cash flow and performance in recent quarters. Restaurant development is so important to the company now, it was added to the Accelerating the Arches 2.0 pillars in January.
Some of this development, however, may look different than it has throughout the company’s nearly-70-year history. To get a better idea of what that means exactly, take a look at the chain’s Fort Worth, Texas, restaurant that opened in 2022. The to-go-only location features a mobile-order-ahead lane, conveyor system that delivers food to customers, self-order kiosks, curbside and an in-restaurant pickup shelf. At nearly 3,200 square feet, it is 26% smaller than an average, traditional McDonald’s.
Chick-fil-A is testing two new restaurant designs – an elevated drive-thru concept and a walk-up concept – aimed at meeting consumers’ changing needs, including and especially their digital needs. Both concepts are set to open in 2024 and are run by local owner/operators. The goal of the tests is to ensure the company is future proofed as it continues to grow.
Chick-fil-A counts over 2,800 domestic locations and is on par to open over 100 restaurants this year. It has maintained that steady pace for the past three years, while digital sales have simultaneously ramped up to around 40%, and even 50% in some markets. Those digital sales have become the focal point of Chick-fil-A’s two tests.
House and Senate Democrats, led by Sen. Bernie Sanders (I- Vt.), chair of the Senate Health, Education, Labor, and Pensions Committee, introduced the Raise the Wage Act, which would gradually raise the federal minimum wage to $17 by 2028, or more than double the current federal minimum wage of $7.25. The legislation would also seek to eliminate the tipped sub-minimum wage over the next seven years (and eliminate the tip credit for workers with disabilities over the next five years).
In celebration of National Avocado Day July 31, Chipotle is hosting its first promotion – “Get in the Pit” sweepstakes – on the fledgling social media channel, Threads. The company claims to be the first major restaurant brand to host a sweepstakes on the platform, which first launched July 5 as an alternative to Twitter.
It’s too early to fully understand how brands will leverage Threads, which is part of the Meta suite of products, but it’s not too early to identify its potential. For context, 10 million users joined Threads in its first seven hours. According to Fast Company, it took Twitter over two years to accomplish that membership number. What’s driving this pace is simple: the app is linked to Meta’s Instagram, providing a built-in follower base.
For its part, Chipotle was one of the first brands to post on the platform and the brand already has nearly 100,000 followers.
Although Domino’s Pizza reported nearly stagnant same-store sales growth of 0.1% for the second quarter ended June 18, 2023, the numbers were not surprising for a company that is focusing on rebuilding its delivery growth, Domino’s Pizza CEO Russell Weiner emphasized Monday.
After dominating the industry during the pandemic, Domino’s has been struggling for several quarters now with rising costs, labor challenges, and being able to keep up with demand. Now, with a recently announced partnership with Uber Eats (the first delivery partnership for the traditional delivery-focused pizza brand) and the promise of an updated loyalty program this fall, Domino’s is planning out a roadmap for the future.
Leigh Anne Zinsmeister talks about unit counts in the industry.
Key take-aways:
- There was very little movement in the Top 10 restaurants by unit count in 2022
- Five restaurants are on long-term growth tears, and five more have sprung up with huge increases
- NRN looked at 100 restaurants under 100 units that are rapidly growing
Links
- https://www.nrn.com/top-500-restaurants/10-restaurants-most-locations-us
- https://www.nrn.com/top-500-restaurants/10-restaurant-chains-added-most-us-locations-2022
- https://www.nrn.com/emerging-chains/100-under-100-emerging-restaurant-chains-take-united-states-storm
Macy’s opened its newest proprietary restaurant, called The Social Kitchen & Libations, in mid-June in Minnetonka, Minnesota. The concept features tableside service with glassware, China, and cloth napkins, and an open kitchen serving dishes such as the brand’s signature chicken pot pie, Mandarin salad, Porchetta sandwich and meatloaf sliders.
There is also a brunch menu with a Bloody Mary Bar, which could easily inspire shoppers to stay longer and spend more.
Tom Leuer, senior director of Macy’s Food Division, said food and drink are important parts of the retail giant’s customer experience. And that has been the case for a very, very long time. In fact, Macy’s food and beverage division dates back to 1890, when the first tearoom opened at Marshall Field’s department store in Chicago.
It’s almost like those of us who cover the restaurant industry get a Christmas-like experience every quarter as we unwrap earnings reports. These reports allow us to peel back a few more layers than what we normally get from press releases or statements, and they enable us to put some pieces together, both for the companies we cover and the industry at large.
Most restaurant companies’ second quarter earnings calls are on deck, with some of the big boys kicking things off next week – namely Domino’s, Chipotle, McDonald’s, Sweetgreen and Texas Roadhouse.
This quarterly overview follows a first quarter that took many of us – on and off Wall Street – by surprise. A lot of expectations were exceeded, especially as consumers continued to show their willingness to pay higher menu prices across the board, and as the labor picture continued to recover from a dismal 2022. Consider Wingstop, for example. Its same-store sales were up over 20% driven largely by traffic growth.
While AI has been one of the biggest trends in the restaurant industry this year, NRN has mostly been tracking how operators put AI voice chat to work in the drive-thru lane and in call centers. But with the rise in prominence of generative AI technology like ChatGPT, there are several more areas of foodservice operations that could be aided – or taken over by – automation, from social media post creation to menu image generation and even menu development.
More and more tech vendors are introducing AI-driven features and capabilities to their turnkey operations. This month, Swipeby introduced Swipeby AI, which allows restaurant operators to automatically generate and respond to social media posts; RestoGPT is a new vendor with the capability of automatically generating an online ordering portal complete with AI-created menu images; and Velvet Taco became the latest restaurant to add a ChatGPT recipe to its menu.
Sanjiv Razdan has spent much of his career in the restaurant industry, beginning as a training manager in India before landing a role at Yum Brands and progressing through various positions around the globe.
He then served for as COO at Applebee’s and Sweetgreen before landing at his current position as president, Americas and India, at the Coffee Bean and Tea Leaf. During a recent interview, Razdan reflected on the opportunities he received throughout this journey.
When Patrick Doyle was leading Domino’s Pizza several years ago, he often referred to it as a “tech company that sells pizza.”
There was plenty of reason for this sound bite – at the time, well before the pandemic, the company served as a digital case study of sorts, delivering to hot spots, testing driverless cars, automating phone orders via AI, name it.
It was a bold statement, to be sure. After all, the cornerstones of our industry are food and service. But a few other chains embraced the idea of being a tech company first, or alongside, a food company. Wingstop and Sweetgreen come to mind. There’s nothing wrong with this. Many (if not most) consumers now want a tech-enabled, convenient, frictionless experience, and at limited-service concepts, those types of experiences have become just as meaningful as the food itself. Tech companies.
Brian Loughran has been with Jersey Mike’s since 1996, starting at the restaurant as a part-timer during high school. In 2004, he joined the home office and has been a part of the system since, now serving as director of training. Without hesitation, he says the company’s culture has kept him aboard and engaged.
After facing multiple quarters of market pressures and rising costs, Domino’s Pizza is relinquishing its former industry-differentiating commitment to first party-only delivery by partnering with Uber Eats and Postmates in a company-first aggregator partnership. For the first time, Domino’s U.S. customers will be able to order pizza through the Uber Eats or Postmates marketplaces starting in four test markets this fall — including Las Vegas — before rolling out to the rest of the country by the end of the year.
McDonald’s announced Tuesday that the company will be discontinuing the McCafé Bakery, and phasing out the sale of the three bakery items — the apple fritter, blueberry muffin, and cinnamon roll — from all restaurants. These menu items were first introduced to McCafé in 2020 and are being discontinued this week.
Naturally, the news has not sat well with McDonald’s fans, who have taken to social media to express their disappointment in the decision.
During times of economic uncertainty, luxury items tend to increase in popularity. Maybe it’s due to high-income people delaying buying big-ticket items but treating themselves to smaller pleasures, or generally stressed-out consumers splurging from time to time. Combine that reality with social media’s interest in visually appealing dishes, plus an intriguing shift by younger consumers toward classic items, and the time is ripe for caviar.
The sturgeon roe has long been the poster child of premium products, but as more farm-raised versions come onstream, caviar prices aren’t necessarily as high as they once were, especially in comparison to the general inflation of most food.
Caviar sales in 2022 exceeded $100 million, according to market research firm Fact.MR, and another research firm, Market Data Forecast, predicts compound annual growth in caviar consumption in North America of 8.9% through 2025.
Episode description:
Leigh Anne Zinsmeister talks about the fastest-growing restaurant chains by domestic systemwide sales.
Key take-aways:
- 456 of the 500 biggest restaurants in the U.S. experienced domestic systemwide sales in 2022
Links
- https://www.nrn.com/top-500-restaurants/10-fastest-growing-restaurants-america-sales
The “person who runs McDonald’s account” texted in June to share that brand icon Grimace was hosting a birthday party beginning June 12. To celebrate, McDonald’s offered a Grimace Birthday Meal, with a limited-edition purple shake, the choice of a Big Mac or 10-piece Chicken McNuggets, and fries.
This latest meal from the quick-service brand launched a whole marketing campaign they could have never predicted.
Users on TikTok, mostly Gen Z, took to the app for the Grimace Challenge where someone tries the Grimace shake and promptly falls or pretends to die. McDonald’s itself has gotten in on the challenge in its own small way, capitalizing on the latest marketing lightening in a bottle moment.
Traffic at the chain has been up since the shake’s introduction, in staggering numbers.
Subway has installed deli meat slicers in about 20,000 U.S. restaurants at an $80 million investment and is expanding its Subway Series menu with four new sandwiches that rely on the new equipment, the company says.
The Milford, Conn.-based quick-service brand, which also has dual offices in Miami, said the slicers were one of the most complex changes it has ever made, entailing changes in store design as well as its supply chain.
Over the past nine months, Subway has added one slicer to its U.S. stories about every five minutes. To highlight the changes in equipment and supply chain, the brand is following up its Subway Series, introduced last year, with a new category called Deli Heroes – a collection of four deli-style subs ordered by name or number.
Episode description:
Nation's Restaurant News executive editor Alicia Kelso talks about Chick-fil-A.
Key take-aways:
- Chick-fil-A remains at the top in consumers' hearts, according to a survey released last week
- This aligns with NRN/Datassential Top 500 sales data, where Chick-fil-A ranks #3 despite being closed on Sundays
- The chain is operating a Little Blue Menu food truck in Louisville
Links
- https://www.nrn.com/consumer-trends/chick-fil-ranked-no-1-customer-satisfaction-9th-straight-year
- https://www.nrn.com/operations/chick-fil-launches-little-blue-menu-food-truck
Taco Bell CEO Mark King, who just announced he will retire at the end of this year, led the brand through unquestionably the most challenging time in the restaurant industry in recent memory.
And he didn’t seem to miss a beat.
Since coming on board in August 2019, King held a steady hand through the pandemic, through an abruptly changed consumer set, and through historic unemployment levels, global uncertainties, and record-setting inflation. Taco Bell is stronger than it’s ever been, and it is strongly positioned to continue that momentum for the foreseeable future.
As Starbucks continues to clash with the SBWorkers United union, the latest scuffle is over allegations that the Seattle-based coffee chain is preventing employees from putting up Pride Month decorations in certain stores – an accusation that Starbucks has vehemently denied. Now, as 3,000+ workers go on strike over these concerns, alongside accusations of union-busting and demands to negotiate union contracts, Starbucks is stepping in with promises of “clearer centralized guidelines” for in-store displays and decorations.
In a letter to employees, Sara Trilling, executive vice president and president of Starbucks North America, reiterated that “there has been no change to any of our policies as it relates to inclusive in-store environments.”
Raising Cane’s — the Louisiana-based, cult-favorite chicken fingers chain known for its special sauce and Texas-style toast — has entered the New York City market with the grand opening of its 8,000-square-foot global flagship store in Times Square on June 27.
Since originally opening in Baton Rouge in 1996, the company has grown to 740 restaurants in 36 states. Now, Raising Cane’s has plans to become a top 10 quick-service restaurant chain with 100 restaurants alone slated to open in 2023. Over the next couple of years, Raising Canes is opening 25 more locations in the New York City metropolitan area, including Manhattan, Brooklyn, Queens, The Bronx, and Long Island, as the company starts to saturate new markets.
A former Nextbite employee is suing the virtual restaurant brand — now owned by the CEO of its former competitor, SBE — for not giving the requisite 60-day notice before laying off approximately 130 employees without cause in May, as stipulated in the WARN (Worker Adjustment and Retraining Notification) Act. Plaintiff and former Nextbite supply chain analyst, Alitza Portohundo, filed the proposed class action lawsuit in the District of Delaware on June 2, and is one of 90 employees that were part of a mass layoff on May 15, termination effective immediately.
Darden Restaurants’ Q4 and fiscal year earnings report Thursday included several positive headlines, such as LongHorn Steakhouse’s strong results, outperformance on traffic and a steady consumer set.
The company’s earnings call came about a week after Darden finalized its $715 million Ruth’s Chris acquisition, adding to its fine dining portfolio. Ruth’s Chris joins an increasingly diversified roster that includes not only LongHorn and Olive Garden, but also Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger. Though way too early to understand Ruth’s Chris’ impact on Darden’s overall performance, CEO Rick Cardenas expects plenty of synergies to come – to the tune of approximately $20 million by the end of fiscal 2025 primarily through supply chain and G&A savings. He also expects the integration to be accreditive to Darden’s earnings per share by about 10 cents to 12 cents in fiscal 2024 and by 20 cents to 25 cents by fiscal 2025.
In November 2022, Upside Foods (formerly known as Memphis Meats) became the first cell-cultivated meat company to pass the FDA approval milestone for its chicken product and was well on its way to selling products in grocery stores and restaurants. Now in June 2023, both Upside Foods and competitor Eat Just and its cultivated chicken product Good Meat have received full FDA and USDA approval (Eat Just received its ‘no questions’ letter from the FDA in March), signaling that both can begin selling their products to American consumers.
Toast is adding a new consumer-facing $0.99-cent surcharge to all online orders, without giving restaurants the option to opt out of the new fee, in an unpopular move that has caused restaurant operators to post letters and tweets of protest on social media. As first reported by The Boston Globe, the fee will be added to all online orders over $10 and will be beta-tested with a small group of restaurants before being rolled out nationwide on July 10.
According to a mockup of Toast’s interface, the .99-cent fee will not show up separately and will be instead part of a combined line called “taxes & fees” that already regularly shows up when customers place online orders. Unless consumers expand the “taxes and fees” subsection, they won’t see the new “order processing fee,” which, according to Toast, is intended to “help fund product investments” like SEO menus, customization, and chargeback coverage.
First Nextbite was sold to SBE CEO Sam Nazarian — who heads the parent company of (former) competitor and fellow virtual restaurant company group, C3. Now it looks like Virtual Dining Concepts’ prized virtual brand centerpiece, MrBeast Burger, might be parting ways with its namesake.
In a series of now-deleted tweets, Jimmy Donaldson, aka the YouTuber, MrBeast, announced that he is “moving on from MrBeast Burger” to concentrate on his series of CPG snacks, Feastables. Donaldson said that the major reason for moving on from the virtual brand with 2,000+ locations is lack of quality control. This directly aligns with the many negative reviews MrBeast Burger has received online, complaining that the food quality and delivery experience is subpar.
Taco Bell has been called a “bully” by some in light of its legal tussle over the “Taco Tuesday” trademark with the much, much smaller Taco John’s. And no doubt it could be considered a bit of a David and Goliath-like situation; Taco Bell has over 7,000 U.S. restaurants and about $13 billion in sales, while Taco John’s has about 375 restaurants and about $440 million in sales.
But it’s worth noting that Taco Bell has also provided a bit of a boost to several smaller brands through its product collaboration strategy. Sure, that strategy includes other giant companies like Doritos and Cinnabon, but the company has partnered with plenty of smaller brands as well, likely putting some of them on a bigger radar. Let’s take a look at some of Taco Bell’s menu collabs from throughout the past 10 years.
The technology sector across multiple industries is facing mass layoffs amid macroeconomic uncertainty – from the tech giants like Amazon, Google and Meta, down to unicorn startups. Now restaurant tech seems to be joining them. After several years of new foodservice tech startups popping up and nabbing big investor checks seemingly every other day, the industry is experiencing a slowdown.
In just the last couple of weeks, both Olo and Grubhub announced layoffs.
Amid this flurry of activity, investors are wondering: has the food tech bubble finally burst?
Cava Group Inc., parent to the 263-unit fast-casual Mediterranean brand, made its public market debut Thursday with shares trading at more than $44 a share at midday, well above its announced pricing of $22 a share.
The Washington, D.C.-based company issued 14.4 million shares on the New York Stock Exchange under the symbol “CAVA,” raising nearly $318 million and valuing the restaurant chain at about $2.45 billion. Cava originally priced its public offering at $17 to $19 a share and raised it Wednesday to $22 a share.
The brand plans a 15% growth rate this year, adding between 60 and 70 new stores.
The Consumer Price Index experienced a 0.1% increase in May, marking its slowest annual rate increase since March 2021. By comparison, the index rose 0.4% in April and has averaged a 4% increase throughout the past 12 months.
According to data from the Bureau of Labor Statistics released Tuesday morning, the CPI is now 4% higher versus the prior year, marking a material slowdown from the 9.1% increase registered in June 2022. That said, the 4% inflationary rate is still above the Federal Reserve’s 2% target and more interest rate hikes could be implemented to continue working toward that number.
SBE Hospitality Group and virtual brand platform C3’s founder and CEO Sam Nazarian has acquired Nextbite, just days after Nation’s Restaurant News reported that Nextbite’s order management arm, Ordermark, had been sold off to Indian software company UrbanPiper. Nextbite and its virtual brands —which includes both original and licensed brands such as Packed Bowls by Wiz Khalifa, Shawarmama, Nestle Toll House Cookies, IHOP, Super Mega Dilla, Thrilled Cheese, Fuku, George Lopez Tacos, and Nathan’s Famous — will live on under the ownership of its former competitor as Nextbite by SBE, but will operate separately from C3’s own virtual brands, which include Umami Burger, Krispy Rice, and Sam's Crispy Chicken.Leadership will pass from CEO Alex Canter — who founded Nextbite in 2020 after merging the then-flourishing virtual restaurant company with technology platform Ordermark — to Nazarian, and operations will be relocated to C3’s headquarters in Miami. According to Food on Demand, a “suite” of former Nextbite executives will stay on board with the company under new ownership.
New York City just passed a minimum wage law for restaurant delivery workers — the first of its kind in the country — that would require app-based food delivery platforms to pay their delivery workers $19.96 per hour, which is almost triple the current $7.09 average rate.
The alcohol to-go business became a critical lifeline for an untold number of restaurants during the pandemic. So critical, in fact, big money was thrown at the business in 2020 and 2021. Uber, for instance, bought Drizly for $1.1 billion in 2021, while Square added a to-go alcohol delivery feature and DoorDash expanded its alcohol delivery to dozens of states that same year.
Now, with pandemic-related restrictions distant in the rearview mirror, off-premises alcohol very much remains a boon for many concepts. Indeed, 20 states and Washington, DC, have since made emergency pandemic regulations allowing alcohol to-go permanent. Another 14 allow it on a long-term, but temporary basis (New York, for example, legalized to-go cocktails through 2025). According to a new report from the National Restaurant Association titled “On the Menu: Trends in on- and off-premises beverage alcohol,” this to-go shift is the most significant change to state alcohol laws since the end of the Prohibition in 1933.
And, as the association notes, it’s here to stay, driven by continued consumer demand for such options. Here are some key takeaways from the report.
Taco Bell has long been a favorite restaurant of vegetarians, and for good reason: Its food is inexpensive, flavorful, and literally full of beans. The seasoned legumes are a regular protein option, which means customers can fully enjoy a real Taco Bell experience without eating animals. Vegans can do fine, too: They just need to order their food without cheese or sour cream.
Indeed, the company says that 23% of all the items it sells are vegetarian.
So it stands to reason that the Irvine, Calif.-based company would develop its own plant-based protein, and indeed it has, and it’s testing the Vegan Crunchwrap at three locations this week.
Zume — once the preeminent name in pizza technology that made headlines and millions in startup funding in 2017 — has shut down more than three years after pivoting away from robot technology to sustainable packaging development. The SoftBank-funded company is allegedly insolvent and chose to liquidate its assets rather than declare bankruptcy, according to tech news publication, The Information.
Zume was founded in 2015 with the goal of automating the pizza industry and attracted the attention of investors, most notably its lead investor SoftBank that poured approximately $375 million into the tech startup. According to Crunchbase, Zume raised $423 million in eight funding rounds — though the exact number remains disputed — and was considered a unicorn startup with a valuation of more than $1 billion by 2018.
During a presentation at Bernstein’s 39th annual Strategic Decisions Conference Thursday, Yum Brands CEO David Gibbs reiterated time and again how his company’s massive global scale creates a significant advantage. One of those advantages comes from the company’s ability to seek out technology companies, acquire them and enable its franchisees to then use those proprietary systems at a reduced cost.
School’s out for summer, and that likely means gaming activity will pick up. Two major restaurant chains are timing new promotions accordingly.
Chipotle is an official launch partner of Street Fighter 6. Players can earn “Fighter Coins” (in-game currency), when they place a digital order on Chipotle’s app, website or Rewards Exchange program.
Also, KFC announced this week that customers who purchase any KFC chicken sandwich on the brand’s app or website will be eligible to unlock exclusive in-game rewards for the new Diablo IV video game. Those rewards include up to five battle cosmetics in KFC’s signature red and white brand colors, with each piece of equipment representing one Diablo class.
As James Beard Awards weekend approaches, a cloud of scandal hangs over the festivities as one of the nominees has been disqualified, others are under investigation for ethics violations, some judges have quit in protest, and some members of the food world wonder if the awards committee has overstepped its bounds.
The scandal started brewing in mid-May when Timothy Hontzas of Johnny’s Restaurant in Homewood, Ala., announced that he had been disqualified for the award for Best Chef in the South, for which he had been nominated, because he yelled at a staff member and guests.
John Currence, a friend of Hontzas’ and the chef of City Grocery one state over in Oxford, Miss., smashed his own 2009 Beard Award for Best Chef in the South in protest, and posted about it in social media.
Then Todd Price, a food journalist and member of the Restaurant and Chef awards committee for the South, and Vishwesh Bhatt, a previous award winner and chef of Snackbar in Oxford, Miss., which is part of Currence’s restaurant group, resigned as a judge.
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There’s a reason nearly every brand is trying to figure out Gen Z consumers’ sweet spot right now. The demographic makes up nearly 70 million Americans, or about 20% of the U.S. population, and has amassed $360 billion in disposable income.
This perhaps explains why the session “The Gen Z Effect: Redefining Dining Choices and New Experiences for a New Generation” at the National Restaurant Association Show attracted a standing-room-only crowd. The session was presented by Lindsay Lyons, group director of customer strategic insights at The Coca-Cola Company, and Robert Byrne, director of consumer and industry insights at Technomic. Their lede? A simple reminder that the generation is far from homogenous, which is a detail that often gets lost in the chase.
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Panda Express announced Tuesday the launch of its first points-based national rewards program. Like many other rewards programs in the “loyalty 3.0” era, Panda Rewards offers personalized rewards and “surprise and delight” prizes as guests spend more over time at Panda Express.
The rewards program also introduces an overtone of gamification to the digital program by encouraging guests to “collect good fortune.” For every dollar spent at Panda Express, a customer will receive 10 points, and once 200 points are accrued, they can begin cashing in points for prizes. Every month, members will unlock a randomized “good fortune” gift, that might include special discounts, free points, or a digital fortune cookie. Members will also be able to redeem a birthday gift of their choice.
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Consumers started trading down at the end of 2022 in response to higher menu pricing. Now, they’re taking things up a notch – more aggressively seeking deals and discounts to use restaurants.
New data from Circana finds that consumer use of deals at restaurants grew by 8% year-over-year in Q1. Consumers’ inflation fatigue is also evidenced by April’s slowing sales growth – the industry’s weakest performance since July 2022 and its second-softest month of growth in over two years, according to Black Box Intelligence.
In other words, consumers are proving they simply don’t want to pay as much for eating out as they have been doing for quite some time, including for the traditionally lower-price point quick-service segment, where menu prices remain 8.2% higher over last year.
On this podcast, we've talked a lot about last week's National Restaurant Association Show: the new technology we saw, the plant-based menu items, the buzz about labor. But what we haven't talked about much yet are the audience of the show itself: the operators.
Editorial director Sam Oches and managing editor Leigh Anne Zinsmeister spent their time in Chicago meeting with restaurant operators and executives to find out what's on their mind these days, now that the pandemic is mostly behind us. Last year's fears about inflation, the supply chain and workforce have mostly dissipated and been replaced with excitement about what lies ahead.
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Lebron James has entered the Taco Bell/Taco John’s Taco Tuesday trademark tussle. So has Jack in the Box.
In a twist to Taco Bell’s fight to drop the trademark status of “Taco Tuesday” – claimed by rival Taco John’s since 1989 – NBA all-star Lebron James this week announced his support for Taco Bell’s effort. Taco Bell filed a petition to cancel the registered trademark last week, claiming its intention to “liberate” the phrase for all businesses to use.
James appears in an ad titled “Taco Bleep,” which, according to Taco Bell, “highlights the absurdity of ‘Taco Tuesday’ being trademarked and encouraging the taco community to join together in support of the liberation movement.”
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Panera Brands announced that José Alberto Dueñas will be the company’s CEO, effective July 1, as the company prepares for its IPO. Dueñas is currently the president and CEO of Einstein Bros. Bagels, which merged with Panera Bread, along with Caribou Coffee, in August 2021.
With this announcement, Panera’s current CEO Niren Chaudhary will move into the chairman position. The company has also named former Starbucks CEO and independent director Patrick Grismer as chairman of the audit committee.
An IPO will bring Panera back to the public market for a second time. The company was public until 2017 when it was bought by JAB Holdings.
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Labor is on everyone’s minds in the restaurant industry. The decrease in available workers has left the restaurant industry desperate for more workers. Some have turned to robots or AI to ease labor pressures while others have raised hourly wages to attract new workers. At the National Restaurant Association Show, labor was a big topic.
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Today is all about new tech from the NRA Show. Technology has certainly evolved over the past several years, from AI to Internet of Things, terms are changing rapidly, and restaurants are ready for the change. This year at the show, Joanna Fantozzi spent her time looking at all the new tech. Much of it was what she predicted in an earlier episode of First Bite: invisible technology with a smattering of robots along with Internet of Things.
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The plant-based movement has certainly changed over the past few years. What was once an explosive market only seems to be getting bigger by the day yet chains like McDonald’s are saying that their plant-based menu items aren’t doing well in the U.S. At the NRA show, Alicia Kelso spoke with several plant-based companies about the future of the movement and how their customers have been impacted.
For months, we’ve been trying to articulate the general state of the restaurant industry and its consumers, and it’s all been a bit dizzying if we're being honest. To nutshell, operators were desperate for optimism in the latter part of 2022 as they continued to manage historically high inflation and labor shortages, and as nearly every crystal ball showed a recession manifesting at some point in 2023. At the same time, consumers were proving they really, really wanted to eat at restaurants after two years of not being able to consistently. The opportunities and the challenges were creating a weird balance.
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Robots have been dominating the National Restaurant Association Show’s tech pavilion and equipment booths for years, and in 2022, we saw everything from robot dogs that can carry your delivery order up the stairs for you, to several different versions of the robot server that can carry trays of drinks and appetizers. For the most part, AI and automation at the 2022 National Restaurant Association show was focused on robots as labor-saving tools, as that was the number one concern of restaurants coming out of the pandemic.
But this year, we predict that much of the newest technology at the National Restaurant Association Show in Chicago next week will be less flashy and more software-focused as data-based digital technology rises in prominence. Of course, automation will still be fully on display as technology vendors tout all-in-one automated solutions for operators, from kitchens of the future to AI-based drive-thru lanes.
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Nation’s Restaurant News, the leading independent media brand serving the foodservice industry, has released its 2023 Restaurant Technology Outlook, outlining the technology strategies and investment priorities of hundreds of restaurant operators.
The survey of nearly 400 restaurant operators, which was conducted by Nation’s Restaurant News Intelligence, the brand’s research and insights platform, found that the vast majority of operators, or 92%, are likely to increase spending on new technology in the next 12 months, with 39% saying they “definitely” will add new technology and 53% saying they “probably” or “possibly” will.
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Taco Bell is fighting to “liberate” Taco Tuesday. The company announced today it has filed legal petitions to cancel the federal trademark registrations for “Taco Tuesday” via the USPTO Trademark Trial and Appeal Board. The company says it believes “Taco Tuesday” should belong to “all who make, sell, eat and celebrate tacos.”
The company is not seeking damages or trademark rights, but rather the ability for usage of a common term via the cancelation of trademark registrations; meaning no one restaurant will be able to claim exclusive rights to Taco Tuesday. Taco Bell said it wants “Taco Tuesday” to be free for all restaurants and vendors to use the term without fear of a cease-and-desist letter or lawsuit.
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Conversational AI in the drive-thru lane is nothing new — NRN has been covering the rise of this trending tech phenomenon since 2019, when companies first begin adapting AI voice assistants in earnest — but the trend has now reached a fever pitch, and more and more limited-service chains are replacing humans with AI drive-thru workers. This is only the beginning: as AI becomes more ubiquitous in the restaurant industry, there will be a major shift in the service model and customer experience.
This month, Wendy’s and CKE Restaurants announced plans to implement test pilots of AI in the drive-thru lane, joining a list that includes White Castle, Del Taco, Panera, McDonald’s, and Sonic.
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Noodles & Company has gradually been raising prices over the past year, as many restaurants have, including a 5% increase in February, and their lower- and middle-income customers have finally started to push back, especially on delivery orders, executives of the 461-unit fast-casual chain told investors.
CEO Dave Boennighausen said delivery represented more than 30% of sales in the company’s first quarter, which ended on April 4.
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Krispy Kreme has been working on its total brand transformation — from doughnut bakery to the newly dubbed “doughnut logistics company” — for a couple of years now, and the overhaul is nearly complete. As Krispy Kreme continues to work on either closing underperforming stores or turning them into hubs to fulfill orders to grocery and convenience stores, the focus on the “Delivered Fresh Daily” strategy was a driving force of the 12.5% revenue growth for the first quarter ended April 2, as doughnuts are now available to a wider range of customers.
While Krispy Kreme continues to add global points of access to doughnuts through grocery and convenience store doors and more — with 350+ PoA added this quarter — the company keeps closing traditional bakeries, with 29 shops closed or converted to distribution hubs last quarter. Global brand reach is only at 5%, CEO Mike Tattersfield said, so the company has a long runway for growth and doughnut access globally.
For the first time in several quarters, Taco Bell wasn’t hogging the Yum Brands earnings spotlight, making some room in Q1 for its sister brand Pizza Hut, which generated an 8% domestic same-store sales increase.
This is a wildly different story from a year ago, when Pizza Hut’s domestic sales plunged by 6% as the chain lapped a strong, pizza-fueled Covid environment from 2021 and struggled with delivery driver shortages that hindered the entire segment.
KFC also got a sliver of that spotlight, reporting a 2% same-store sales increase on the quarter. Like Pizza Hut, KFC got a lift from the expansion of its menu to appeal to more guests, as well as a barbell pricing approach. Specifically, KFC’s new chicken wraps were introduced in the quarter as part of a two-for-$5 promotion and that deal strongly resonated with lower-income consumers.
For more, here's executive editor Alicia Kelso.
The economic trend for nearly every restaurant operator in 2022 was to raise prices, with most companies taking mid-single digit-- or sometimes double-digit menu price increases in order to keep pace with inflationary trends. But just as operators need to be careful to not alienate customers by increasing menu prices too much, they also must learn how to balance enticing customers with deals while making sure revenue still grows.
As this period of economic uncertainty continues, there has been an operational trend away from discounting and more toward everyday consumer value—a more complex equation that doesn’t just take price into account, but also quality of food and beverages, uniqueness of menu items, experience, and speed of service. On recent earnings calls, several restaurant executives have mentioned taking a break from discounting in order to improve revenue returns for an industry that’s just lapping the COVID-19 omicron-related downturn from last year, including Bloomin’ Brands, Brinker International, and Restaurant Brands International.
For more on the value movement, we turn to senior editor Joanna Fantozzi.
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Let’s turn to Alicia Kelso who has a rundown of the month’s earnings from Q1. From brands including McDonald’s and Chipotle Mexican Grill to companies like Dine Brands and Brinker International, chains have been reporting on traffic and sales. Overall, the result was positive despite the macroeconomic environment. While people often reduce spending during an impending recession or during times of high inflation, the American consumer does not seem deterred. In fact, spending was up at chains across the country as was traffic.
Alicia has more on the story.
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While some may be shying away from discounting amid the economic environment, Just Salad is embracing it.
The New York City-based salad chain, which has managed to keep prices low amongst its competitors despite some pricing, recently launched a discount program to increase the use of its signature blue reusable bowls.
It worked so well; the chain repeated it weeks later.
The program listed salads for the chain at $8.99 if you used a reusable bowl. The bowls, which sell for $1, have been in use at the chain since it first started 17 years ago.
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At this time last year, Papa Johns International Inc. was outperforming its rivals and struggling to keep up with demand, but one year later, year over year growth for the Louisville, Ky.-based pizza chain has stalled as the industry laps effects from the COVID-19 omicron variant. Papa Johns reported flat same-store sales for the first quarter ended March 26, 2023. While momentum was somewhat boosted by continued menu innovation, it’s hard to compare current performance to last year’s record-breaking quarter.
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Yum Brands reported Q1 results Wednesday morning, including positive domestic same-store sales results for KFC, Taco Bell and Pizza Hut. KFC’s sales were up 2%, while Taco Bell was up 9% and Pizza Hut jumped 8%. The Habit Burger Grill’s same-store sales were flat on the quarter.
The company’s development engine also continued to churn, with 746 gross units opened during the quarter and “lots of white space remaining,” according to CFO Chris Turner. But perhaps the boldest headlines from the company’s first quarter were its continued digital acceleration and menu innovation. Yum’s digital mix is now at 45% globally and represents nearly $7 billion, which is a $1 billion increase versus last year. Taco Bell specifically experienced an 8-point improvement in its digital mix after launching delivery as a service through its mobile app, for instance.
Episode description:
Less than two months after former FAT Brands CEO Andy Wiederhorn announced that he was stepping down from his role as head of the company in connection with an ongoing federal investigation, the Fazoli’s and Johnny Rockets parent company announced his two successors. Co-CEOs Ken Kuick and Rob Rosen will helm FAT Brands moving forward, while maintaining their respective roles in the company as chief financial officer and executive vice president of capital markets.
Meanwhile, Wiederhorn is continuing in his role as chairman of the board. He and his family’s company, Fog Cutter Capital, still maintain a controlling interest (55.5%) in FAT Brands, even while they are being investigated by federal authorities on accusations of securities and wire fraud, money laundering, and attempted tax evasion.
So, what exactly have the two new CEOs of FAT Brands inherited as they step into their new roles at the company?
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As consumers, especially younger ones, move away from meat-centered diets, many restaurateurs are adjusting their menus to offer more plant-based alternatives. But that doesn’t necessarily mean meat analogs. The same people who are looking to cut down on animal products for perceived health, environmental, or other reasons also tend to be looking for clean labels and minimally processed food.
Many chefs are on the same page as their guests.
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Following a relatively optimistic March in which independent restaurants’ rent delinquencies improved materially, things seemed to have slowed down again. According to new data from Alignable, 49% of small restaurant businesses couldn’t pay the rent in April.
April’s delinquencies were at the highest level thus far in 2023. In March, rent delinquencies fell to 34% versus 40% in February, 38% in January and 52% in December.
Episode description:
Senior editor Joanna Fantozzi talks about Domino’s earnings.
Key take-aways:
- Domino’s same-store sales were up
- The pizza company is emphasizing carryout as it continues to struggle with delivery
Links
- https://www.nrn.com/news/domino-s-leans-carryout-more-and-more-delivery-struggles-continue
Episode description:
Chipotle’s Q1 earnings results beat every estimate and were nothing short of impressive, particularly given a continued uncertain economic backdrop. While its comp growth of 10.9% is perhaps no surprise lapping last year’s omicron variant, the 4% jump in traffic is notable as prices remain about 10% higher year-over-year and as consumers grow increasingly anxious about the macro environment.
Chipotle’s quarter was buoyed by its operational improvements yielded from what it calls Project Square One. The program was put into place last summer to bring its workforce up to speed after two years of abnormally high, pandemic-induced turnover. Last July, Chipotle’s Chief Restaurant Officer Scott Boatwright said Project Square One is essentially about focusing on the little things – moving, listening, etc. – that add up during a peak volume window, making sure that staffing is maximized at the right time and, ideally, reducing those aforementioned turnover rates.
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Fast-casual restaurant brand Panera Bread has launched its latest line of merchandise, featuring its famous menu items like bread and mac & cheese, the St. Louis-based brand announced.
The merchandise launch is part of a week-long promotion called “Panera Faves” filled with deals for both MyPanera members and app users from May 1 through May 7. The chain’s loyalty program, which has been in use since 2010, allows members to choose their own rewards, a feature the brand introduced in 2022. The program currently has 52 million members, according to the company.
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During the height of the pandemic, with restaurant dining rooms shuttered, many American kitchens and dining rooms filled with smiley face plastic delivery bags, disposable cutlery and single-use containers. Since the return to normalcy, the on-demand delivery culture has not abetted, and our appetite for restaurant delivery has only grown.
In fact, according to the National Restaurant Association’s 2023 State of the Industry report, two-thirds of U.S. adults said they’re more likely to order takeout from a restaurant now than before the pandemic. And according to the international membership forum, the Organization for Economic Co-operation and Development, plastic waste has doubled from 2000 to 2019, and 40% of it comes from packaging. That’s a lot of clamshell containers.
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Los Angeles-based fast-casual Sweetgreen has finally launched its loyalty program, the restaurant chain announced on Monday. It’s been dubbed Sweetpass and has two membership options, one paid and one free.
The chain announced during its latest quarterly earnings call in February that it would be launching the program in April as a subscription-based model.
The free version of Sweetpass allows customers to access challenges, new menu items, and merchandise exclusively available to loyalty members.
Sweetpass+ is the premium version of the chain’s new loyalty app. This program allows customers to pay $10 a month for $3 off each Sweetgreen order — up to once a day — plus premium Sweetgreen support, delivery perks, premier access to merchandise drops, and exclusive Sweetgreen experiences.
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In October, Taco Bell enlisted comedian/actor Pete Davidson to apologize for the brand “going too far” with its breakfast innovation, noting that the morning is no time for such intensity.
The campaign was apparently a wild success. During parent company Yum Brands’ Q4 earnings call in February, CEO David Gibbs said Davidson helped “drive consumer buzz” for breakfast, which led to a 9% transaction growth during the daypart.
As they say, if it’s not broken, there is no need to fix it. And so, Taco Bell announced it is partnering with Davidson once again to promote breakfast, though this time he will play the part of “Peter Davidson” to denote a “toned down persona."
Episode description:
For the modern restaurant, data is power. Data can tell you approximately how much beef you need to purchase for a typical Saturday evening shift, and it can tell you how many employees to put on the schedule for that evening, and perhaps most crucial of all—it can tell you what percentage of customers are ordering a beef entree, where they come from, and how likely they are to return on the following Saturday night.
But despite the importance of data, many operators don’t feel they are utilizing it to their advantage. In fact, according to the 2023 Restaurant Technology Outlook survey recently released by Nation’s Restaurant News, data is an untapped opportunity for operators. Only one-third of operators are believe that they’re definitely or probably optimizing data enough, while 43% of operators say the opposite. But despite the act that data can be crucial to operations, only one-quarter of respondents said that they want to invest in data management and security in the next year.
Let’s turn to Joanna Fantozzi for more on this story
Episode description:
Executive editor Alicia Kelso writer talks about sauces in the restaurant industry.
Key take-aways:
- McDonald's announced this week that soon consumers will be able to add Big Mac sauce to any order
- It's just the latest QSR brand to capitalize on the popularity of sauces
- Others recently jumping on the trend include Chick-fil-A and KFC
Links
- https://www.nrn.com/menu/sauces-become-new-qsr-battleground
- https://www.nrn.com/marketing/chick-fil-adds-more-retail-sauces-and-new-merchandise-line
Episode description:
Editorial director Sam Oches talks about The 2023 Power List.
Key take-aways:
- The Power List this year focuses on restaurant general managers
- General managers truly hold the industry together but get very little credit
- The role has evolved a lot throughout the pandemic
Links
- https://www.nrn.com/people/meet-2023-power-list
- https://www.nrn.com/workforce/how-restaurants-can-ace-general-manager-position
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McDonald’s is ready to debut what it’s calling its “best burgers ever.” The company announced today it is making a few changes to its burgers, including new, softer buns and more Big Mac sauce on its signature Big Macs. Some tweaks have also been made to the cooking process to yield a more consistent sear and meltier cheese, and the company is adding white onions at the grill for a caramelized flavor.
Links
- https://www.nrn.com/menu/mcdonald-s-rolling-out-its-best-burgers-ever
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Last spring, “NFT” was the buzzword of the moment, alongside terms like “crypto” and “metaverse” and “Web3,” and at the time, experts argued over whether this next phase of the Internet could change customer (and restaurant) behavior and experiences forever, or if it was just a fad. One year later, we’re starting to get a better picture of how exactly NFTs have shaped consumer demands.
For more on this story, let’s turn to Joanna Fantozzi.
Links
- https://www.nrn.com/technology/were-nft-membership-restaurants-just-passing-fad-0
Episode description:
We all know the pandemic was a massive catalyst in the acceleration of digital behaviors and that restaurants were forced to adjust accordingly. We also know this adjustment was too big a weight to bear for many small and independent restaurants.
A new nonprofit organization is trying to provide more support, resources and advocacy for restaurant owners and operators as they navigate a new (digital) normal. The Digital Restaurant Association launched today after nearly a year of foundational research. It is the brainchild of Bradley Tusk, a venture capitalist and political strategist who recruited his friend Joe Reinstein to be the DRA’s executive director. The two met while Reinstein was working as the deputy social secretary for the Obama Administration. Notably, Reinstein previously worked in the restaurant industry, including with Taco Bell on the marketing/advertising side. His subsequent experience has been marrying the world of advertising and marketing to the world of digital media, which he calls “fortuitous because that’s the way the world was going.”
Links
- https://www.nrn.com/technology/digital-restaurant-association-launches-support-restaurants-digital-era
Episode description:
Nation's Restaurant News executive editor Alicia Kelso talks about inflation in the restaurant industry.
Key take-aways:
- The Bureau of Labor Statistics' Consumer Price Index for March was released Wednesday morning.
- Food-away-from-home prices are up 8.8% year-over-year
Links
- https://www.nrn.com/finance/menu-price-inflation-surpassed-grocery-inflation-march
Episode description:
Chipotle today unveiled what it is calling a new “responsible restaurant design," which uses energy-efficient equipment and systems, and 100% renewable energy from wind and solar power through the purchase of certified renewable energy credits. Additional features include electric charging stations at select locations, biodegradable products such as cutlery, straws and bowls, cactus leather chairs, and artwork made from recycled husks.
The company plans to have more than 100 of its new locations in 2024 using the all-electric equipment, as well as other elements from the new design.
Links
- https://www.nrn.com/operations/chipotle-unveils-new-energy-efficient-restaurant-design
Nation's Restaurant News executive editor Alicia Kelso talks about sustainability in the industry.
Key take-aways:
- Yum Brands adopted a new packaging policy to streamline its sustainability efforts across brands
- The policy moves each of its four restaurant brands under the same packaging blueprint and includes three focus areas, including the support of better recycling systems and reusable products.
Links
- https://www.nrn.com/quick-service/yum-brands-adopts-new-packaging-policy-streamline-sustainability-efforts
Episode description:
One quarter down for 2023 and we still don’t have a whole lot of certainty about the macroeconomic picture and its implications for the restaurant industry. Our crystal ball has displayed mixed signals for months (here and here, for instance) and there aren’t many indicators that’s going to change anytime soon.
What’s mixed, exactly? Well, on one hand, labor is improving for the industry and consumers have proven their willingness to access restaurants despite relentlessly higher menu prices. On the other, customers are getting anxious about bank turmoil and layoffs and higher interest rates and are continuing to pull back on discretionary spending. A recession is yet to be declared, though several signs are pointing aggressively in one’s direction.
Links
- https://www.nrn.com/finance/trade-down-continues-consumers-cut-back-restaurant-dinners
Episode description:
Starbucks founder and former CEO Howard Schultz ran for President in 2020 as a Democrat. At the time, Starbucks was the ideal liberal company, providing benefits to employees, and supporting LGBTQIA+ rights. While Schultz didn’t ultimately make it – he dropped out of the race in 2019 – he was viewed as a liberal at the time. That all changed later two years later in December 2021 when the first Starbucks store voted to unionize.
We now know that it was because of a former Rhodes scholar who was paid by Workers United to work at a Starbucks location in Buffalo, New York and begin what has ultimately become an almost 300-store movement to unionize Starbucks.
Throughout this campaign by store leaders, Starbucks has become anti-union even going so far that they were accused of union busting and Schultz had to speak before Congress. That was last week.
Where does Starbucks stand on the scales of liberalism? It’s too soon to say but it begs the question, where does Schultz stand now that he’s stepped down as CEO at Starbucks?
Episode description:
Bret Thorn talks about the latest Dunkin' commercial with Ben Affleck.
Key take-aways:
- Dunkin' is attracting all generations via drinks and commercials
- This isn't the first Ben Affleck commercial and probably won't be the last
- Dunkin' is promoting a deal amid inflation and a rocky economy
Links
- https://www.nrn.com/quick-service/dunkin-promotes-coffee-and-doughnut-deal-ben-affleck-commercial
Episode description:
Joanna Fantozzi talks about Papa John's recent foray into NFTs.
Key take-aways:
- Papa John's NFTs are not tied to any restaurant perks
- The metaverse loyalty 3.0
- Maybe the time for NFTs have passed
Links
- https://www.nrn.com/quick-service/papa-johns-launching-its-first-nft-metaverse-partnership-onerare
Episode description:
Noodles & Company, which already sees its Noodles Rewards loyalty program as a driver of traffic and sales, added new perks for its 4.5 million members.
The new Extra Goodness perk can be redeemed daily. The specific offer varies each day and might be an automatic discount, an upgrade to a larger-sized entrée, or a free “add-on” such as added protein to a pasta bowl.
Let’s hear more from Bret Thorn.
Links
- https://www.nrn.com/fast-casual/noodles-company-adds-new-perks-its-loyalty-program
Episode description:
Alicia Kelso talks about Salata's record-breaking growth.
Key take-aways:
- Salata invested in tech pre-pandemic
- The brand is eld by two women who used to work together at Schlotsky's
- Michelle Bythewood asked to be president while she was CMO
Links
- https://www.nrn.com/franchising/how-salata-positioned-itself-record-breaking-growth
Episode description:
Howard Schultz — current board chairman and former CEO of Starbucks — defended allegations of union-busting against the Seattle-based coffee giant during a three-hour-long U.S. Senate Health, Education, Labor, and Pensions committee hearing led by Senator Bernie Sanders (I-Vt.) Wednesday. Both Howard Schultz and employees of Starbucks answered questions posed by bipartisan members of the committee during the packed hearing entitled, No Company is Above the Law: The Need to End Illegal Union Busting at Starbucks.
The Senate hearing came about after weeks of negotiations between the Senate committee and Starbucks, which initially tried to send someone other than Howard Schultz, who was only interim CEO during a portion of the now 16-month-long clash with Starbucks Workers United. However, Sen. Sanders refused to accept anyone testifying other than Schultz and, under threat of subpoena, he eventually agreed to testify Wednesday.
Links
- https://www.nrn.com/news/howard-schultz-defended-against-allegations-union-busting-heated-senate-hearing
Episode description:
Alicia Kelso talks about IHOP's new menu launch.
Key take-aways:
- IHOP has played around with menu items since IHOb
- The brand has introduced new dayparts
- All the new items are based on customer feedback and research
Links
- https://www.nrn.com/menu/ihop-s-largest-menu-evolution-ever-comes-after-years-guest-research
Episode description:
Joanna Fantozzi talks about Chipotle's unions.
Key take-aways:
- Chipotle had to pay $240,000 to former workers
- There were signs posted in 40 units that admitted to union-busting
- the former workers will get preferential treatment if and when they ever apply to work at Chipotle
Links
- https://www.nrn.com/fast-casual/chipotle-mexican-grill-agrees-pay-ex-employees-240000-after-maine-store-was-shuttered
Episode description:
Alicia Kelso talks about Chick-fil-A's menu process.
Key take-aways:
- Chick-fil-A has a storied history beginning in the 1940's
- Very little menu innovation was done before the early aughts
- The headquarters has a menu wall
Links
- https://www.nrn.com/menu/look-history-and-process-behind-chick-fil-s-menu-introductions
Episode description:
Senior editor Joanna Fantozzi talks about last week's Starbucks shareholders meeting.
Key take-aways:
- Starbucks CEO Laxman Narasimhan addressed invetors for the first time.
- The Starbucks Union organized a strike of 115 stores around the country.
- The company hinted at some of its labor challenges in the meeting's introduction.
Links
- https://www.nrn.com/news/starbucks-addresses-continued-labor-issues-annual-shareholders-meeting
Episode description:
Alicia Kelso talks about Texas Roadhouse's recent success.
Key take-aways:
- Texas Roadhouse saw its brand value increase by 56% in one recent study
- That same study detailed that Texas Roadhouse is the fastest-growing chain
- The chain's main factor for its success it its loyal fanbase
Links
- https://www.nrn.com/finance/texas-roadhouse-s-brand-value-has-jumped-56-year
Papa Johns and Pizza Hut have touted their third-party delivery partnerships as a boon to their financial performance. Quarter after quarter, Papa Johns CEO Rob Lynch has credit third-party aggregators with helping to boost some of the post-pandemic staffing shortages and helping them to keep up with delivery demand. However, just like Domino’s, Papa Johns traffic has been struggling recently, even as sales are bolstered by menu price increases. This could simply be a case of Papa Johns settling into a new normal after successfully climbing out of the John Schnatter-sized hole in 2018 and 2019.
In fact, one analyst thinks that right now, Papa Johns might be “winning” the pizza wars, even though all three brands are in it for the long-haul.
Episode description:
Joanna Fantozzi talks about Pizza Hut's success.
Key take-aways:
- Pizza Hut is up in traffic, unlike its competitors
- It was only 6 years ago that Domino's overtook Pizza Hut in sales
- Pizza Hut is relying on nostalgia rather than technology
Links
- https://www.nrn.com/operations/pizza-industry-trouble-or-normalizing-after-long-pandemic
Episode description:
Joanna Fantozzi talks about the players int he pizza war.
Key take-aways:
- Pizza Hut has seen recent positive numbers in comparison to its cohorts
- Domino's is at risk of being overtaken by comeback story Papa Johns
- Technology is really lacking across the three big chains
Links
- https://www.nrn.com/operations/pizza-industry-trouble-or-normalizing-after-long-pandemic
Episode description:
TK writer talks about tk in the industry.
Key take-aways:
- NFTs are the next loyalty frontier
- The road is just starting for NFTs
- They allow customers to have a more personalized experience
Links
- https://www.nrn.com/technology/tech-tracker-nft-memberships-are-next-chapter-loyalty-programs
Episode description:
The Women’s Foodservice Forum is an annual event – with activations throughout the year digitally – where women and male allies gather to discuss issues like pay parity, gender equality, childcare, burnout and more.
The conference ended earlier this week and executive editor Alicia Kelso is back with all her stories of women empowering other women. Listen to her on today’s episode of First Bite discuss her experience and some key takeaways from the conference.
Episode description:
Senior editor Joanna Fantozzi talks about one brand's latest expansion efforts.
Key take-aways:
- Fogo de Chão s increasing its size
- The brand is possibly preparing for an IPO
- It's been experimenting with different meats
Links
- https://www.nrn.com/operations/fogo-de-ch-o-ceo-barry-mcgowan-maintaining-smart-growth-upscale-dining-industry
Episode description:
Holly Petre talks about Chick-fil-A's international expansion.
Key take-aways:
- Chick-fil-A has tried international expansion before
- Consumers abroad may not be as keen on the company's politics
- Plant-based resonates more with consumers overseas
Links
- https://www.nrn.com/quick-service/report-chick-fil-plots-international-expansion
Episode description:
Senior food and beverage writer Bret Thorn talks about lemonade.
Key take-aways:
- McDonald's is rolling out lemonade to some cities for a limited time
- They're not the only ones participating in the trend however
- Tropical flavors aren't used as much as others
Links
- https://www.nrn.com/menu/mcdonald-s-latest-chain-offer-lemonade
Episode description:
Alicia Kelso talks about Wendy's breakfast.
Key take-aways:
- This is Wendy's fourth shot at breakfast
- Profits are hitting the low end of the spectrum
- McDonald's is the big giant
Links
- https://www.nrn.com/finance/how-s-wendy-s-breakfast-doing-three-years
Episode description:
Executive editor Alicia Kelso talks about McDonald's chicken platform.
Key take-aways:
- Chicken consumption has increased 40% since the 1980s.
- McDonald's has trademarked its chicken sandwich name, The McCrispy
- The chain sees chicken as the next frontier
Links
- https://www.nrn.com/top-500-restaurants/mcdonald-s-rebrands-and-expands-its-chicken-sandwich-platform
Episode description:
Executive editor Alicia Kelso talks about a Taco Bell franchisor's milestone moment.
Key take-aways:
- Taco Bell is performing well making it a suitable candidate for franchising
- Diversified Restaurant Group is adding more Taco Bells to its portfolio
Links
- https://www.nrn.com/franchising/taco-bell-franchisee-reaches-300-unit-milestone-plans-double-next-five-years
Episode description:
Executive editor Alicia Kelso talks about the recent data breach at Chick-fil-A.
Key take-aways:
- This is not the first data breach nor will it be the last
- As companies increasingly use their apps, they become more vulnerable
- New positions in the C-suite are being created to handle these breaches
Links
- https://www.nrn.com/technology/chick-fil-confirms-data-breach
Episode description:
Executive editor Alicia Kelso talks about Potbelly's latest earnings call.
Key take-aways:
- Potbelly's five-pillar strategy is working
- New technology is a big boon to the sales trends
- Sales are at an all-time high
Links
- https://www.nrn.com/finance/potbelly-continues-gain-market-share
Episode description:
Alicia Kelso talks about celebrity marketing in the restaurant industry.
Key take-aways:
- Restaurants are back to working with celebrities after a break at the beginning of the pandemic
- McDonald's kicked off this trend resurgence working with Travis Scott in Fall 2020
- The key is to keep the product as the centerpiece of marketing campaigns
Links
- https://www.nrn.com/quick-service/look-all-celebrity-meals-mcdonald-s-has-featured-2020
- https://www.nrn.com/marketing/how-kfc-working-attract-younger-consumers
- https://www.nrn.com/marketing/how-jersey-mike-s-marketing-strategy-evolved-include-danny-devito
Episode description:
Joanna Fantozzi talks about QR codes and other technology trends in the restaurant industry.
Key take-aways:
- Olo is adding and expanding several new features with the purpose of easing guest friction and improving communication between operators and customers.
- Olo also launched enhanced QR code ordering, which lets customers update their table number as they dine so servers can find them.
- These things are easy for guests and solve problems rather than create headaches.
Links
- https://www.nrn.com/technology/tech-tracker-restaurant-qr-codes-are-evolving-and-so-should-yours
Episode description:
Joanna Fantozzi talks about a new technology player in the industry.
Key take-aways:
- CloudChef is the Spotify or Apple Music of restaurant technology
- Cloud kitchens will be changed with this proprietary technology
- Chefs can earn a commission
Links
- https://www.nrn.com/technology/tech-tracker-what-would-spotify-food-delivery-look
Episode description:
Executive editor Alicia Kelso talks about Jersey Mike's impact on the industry.
Key take-aways:
- Jersey Mike's is investing in celebrity for the first time
- The chain wants to become America's sandwich shop
- National ad campaigns didn't start until 2014
Links
- https://www.nrn.com/marketing/how-jersey-mike-s-marketing-strategy-evolved-include-danny-devito
Episode description:
Holly Petre talks about Sweetgreen's latest earnings call.
Key take-aways:
- Sweetgreen underperformed and is cutting funds
- The new loyalty program is launching in April
- there will be less new stores open this year than last year
Links
- https://www.nrn.com/fast-casual/sweetgreen-launch-loyalty-subscription-programs-april
Episode description:
Alicia Kelso talks about women in the industry.
Key take-aways:
- Women are lacking in leadership positions in the food industry
- Women make up more than half of the frontline staff
- Organizations are trying to help with programs designed to reach gender parity
Links
- https://www.nrn.com/workforce/how-restaurant-industry-breaking-down-gender-equality-barriers
Episode description:
Executive editor Alicia Kelso talks about Texas Roadhouse's latest earnings call.
Key take-aways:
- The Great Trade Down is happening but Texas Roadhouse is an outlier, not the rule
- Texas Roadhouse has an affinity that other brands don't have
- The brand may soon lap Applebee's and Olive Garden in sales
Links
- https://www.nrn.com/finance/texas-roadhouse-has-averaged-most-guests-its-history-start-2023
Episode description:
Managing editor Leigh Anne Zinsmeister talks about Q4 earnings.
Key take-aways:
- The Great Trade Down is happening
- Texas Roadhouse is an exception to the rule
- QSRs are benefitting from the Great Trade Down
Links
- https://www.nrn.com/top-500-restaurants/how-10-restaurant-companies-performed-their-latest-quarters
Episode description:
Senior editor Joanna Fantozzi talks about generative AI.
Key take-aways:
- The new, fancy tech can be for restaurants
- There are a multitude of uses for generative AI
- Think outside of the box when it comes to generative AI
Links
- https://www.nrn.com/technology/how-new-generation-ai-will-impact-restaurant-industry
Episode description:
Executive editor Alicia Kelso talks about the recent restaurant spending report.
Key take-aways:
- Credit card usage is up as well as debt
- Restaurant spending is up despite inflation and a slow December
- Inflation has cooled but not as much as economists predicted
Links
- https://www.nrn.com/consumer-trends/inflation-doesn-t-seem-be-dampening-consumers-restaurant-spending
Episode description:
Executive editor Alicia Kelso talks about the new way Chick-fil-A is treating drivers well in New York City.
Key take-aways:
- Chick-fil-A is treating drivers like customers
- The Brake Room will have amenities for drivers of all kinds
- You don't need to be a Chick-fil-A driver to use it
Links
- https://www.nrn.com/delivery-takeout-solutions/why-chick-fil-opening-brake-room-nyc-s-delivery-drivers
Episode description:
Senior editor Joanna Fantozzi talks about Krispy Kreme's latest earnings report.
Key take-aways:
- Krispy Kreme wants to be everywhere
- It's becoming a specialty donut shop
- More wild flavors are out there
Links
- thttps://www.nrn.com/finance/krispy-kreme-s-omnichannel-strategy-continues-pay
Episode description:
Executive editor Alicia Kelso talks about the latest Consumer Price Index report.
Key take-aways:
- Full service is taking more price than limited service
- Inflation isn't softening the way experts thought
- Grocery prices remain higher than menu prices
Links
- https://www.nrn.com/finance/january-data-proves-inflationary-environment-very-stubborn
Episode description:
Executive editor Alicia Kelso talks about McDonald's latest marketing initiative.
Key take-aways:
- The war chest is at it again
- McDonald's is making a big move with the Super Bowl
- Numbers show these meals are lucrative
Links
- https://www.nrn.com/quick-service/mcdonald-s-recruits-cardi-b-and-offset-its-latest-famous-meal-offering
Episode description:
Editorial director Sam Oches talks about our Chicken Showdown.
Key take-aways:
- Chicken chains are on the rise
- NRN picked 9 chicken chains to showcase
- It's up to you to vote on your favorite
Links
- https://www.nrn.com/news/meet-restaurant-players-chicken-showdown
Episode description:
Joanna Fantozzi, senior editor, talks about the latest news about Starbucks.
Key take-aways:
- We will see more lawsuits against Starbucks come to fruition
- Record-breaking sales have hit the chain despite these troubles
- A new podcast is in the works with its metaverse ambitions
Links
- https://www.nrn.com/quick-service/another-judge-found-starbucks-guilty-unfair-labor-practices
- https://www.nrn.com/consumer-trends/how-starbucks-rewards-program-modeling-itself-after-platinum-credit-cards
Episode description:
Executive editor Alicia Kelso talks about the new KFC wraps.
Key take-aways:
- KFC's wraps are a way to reach Gen Z
- Embracing boneless chicken for younger consumers
- KFC's sister brand Pizza Hut is reaping the rewards of aiming for a younger consumer
Links
- https://www.nrn.com/quick-service/kfc-launching-wraps-attract-younger-consumers
- https://www.nrn.com/quick-service/taco-bell-s-breakfast-drives-strong-q4-results
Episode description:
NRN senior food & beverage editor Bret Thorn talks about what he calls "ombre drinks"
Key take-aways:
- Multi-toned drinks from coffees to cocktails are gaining popularity
- Taiwanese cheese tea was at the forefront of this trend
- The visual appeal draws in consumers
Links
- https://www.nrn.com/food-trends/mix-2023-trend-predictions-reasons-restaurant-optimism-pickleball-concept-more
Episode description:
Alicia Kelso, NRN's executive editor, talks about the rent model in the industry.
Key take-aways:
- The rent model is broken
- But more restaurants were able to pay rent
- The future isn't as cloudy as we thought
Links
- https://www.nrn.com/fast-casual/why-restaurant-rent-model-needs-change
- https://www.nrn.com/finance/more-restaurant-operators-were-able-pay-their-rent-january
Episode description:
Executive editor Alicia Kelso writer talks about the latest jobs numbers for the industry.
Key take-aways:
- The outlook is better
- Inflation is still very real
- Once you unlock that pay increase genie it can't go back inside
Links
- https://www.nrn.com/workforce/january-was-strong-month-restaurant-hiring
Episode description:
Senior editor Joanna Fantozzi talks about equipment trends in the industry.
Key take-aways:
- Labor solutions abound
- Pizza products
- Are buffets coming back?
Episode description:
Editorial director Sam Oches discusses the future of casual-dining based on an episode of his podcast, Take-Away with Sam Oches.
Key take-aways:
- The outlook for casual-dining is positive
- Entertainment is in but not in the traditional eatertainment sense
- Full-service brands need to be nimble
Links
- https://www.nrn.com/take-away-sam-oches/what-can-full-service-restaurants-expect-2023-ceo-logan-s-roadhouse-j-alexander
Episode description:
Executive editor Alicia Kelso talks about the McDonald's Q4 earnings along with her key take-aways from the call.
Key take-aways:
- Marketing is king especially in the midst of not releasing any new LTOs
- Comp sales are high at 10.3%
- The brand is still providing the perception of value
Links
- https://www.nrn.com/finance/mcdonald-s-increased-traffic-counts-drive-strong-q4-results
- https://www.nrn.com/operations/mcdonald-s-sharpens-its-operations-it-returns-domestic-unit-growth
The stage is set for the LVII Super Bowl, with the Philadelphia Eagles squaring off against the Kansas City Chiefs Feb. 12 in Glendale, Ariz.’s State Farm Stadium
Glendale is no stranger to big-ticket games, serving as the home of the Arizona Cardinals and, annually, college football’s Fiesta Bowl. The stadium has also already hosted the Super Bowl on two different occasions, in 2008 and 2015. For the uninitiated, Glendale is a suburb of Phoenix complete with a sports and entertainment district that boasts several hotels, shops and restaurants to support the sporadic but heavy volume of foot traffic accompanying these (and other) major events. Nearly 80,000 fans are expected to fill the stadium to capacity, while tens of thousands of others will descend upon the broader Valley to attend Super Bowl-themed concerts and parties and more.
Hear more about some area operators from Alicia Kelso
Chipotle has launched a new hiring campaign to help fill 15,000 job openings ahead of the chain’s busy season, which is typically from March to May. The campaign features stories of six existing employees and their career progression, as well as behind-the-scenes footage of their jobs. This campaign comes as Chipotle looks to more than double its footprint to 7,000 locations in North America in the next several years, from its nearly 3,100 locations.
While recruitment is the main focus of this campaign, retention is also an objective. According to the company, its workforce investments in 2022 have shown increased retention rates.
After being introduced to both the Senate and the House in Dec. 2022, the Restaurant Revitalization Tax Credit Act is being reintroduced to the new 118th Congress by Sens. Ben Cardin (D-Md.), Sherrod Brown (D-Ohio) and Patty Murray (D-Wash.). The legislation would create a special tax credit in 2023 for those who applied for, were eligible for, but did not receive a Restaurant Revitalization Fund grant because the U.S. Small Business Administration ran out of money.
"We have not forgotten about these restaurants," Sen. Cardin said.
Nearly two-thirds of eligible applicants — or 175,000 businesses — did not receive funding from the original $28.6 billion of RRF grants awarded to restaurants in 2021. While the second round of the Restaurant Revitalization Fund died in Congress in May, RRF came back into the conversation this fall when the SBA distributed $83 million in leftover funds to 169 restaurants from the first go-around.
California’s controversial FAST Act legislation, also known as Assembly Bill 257 — which would create a fast-food industry regulatory council and could raise the minimum wage to $22 an hour — is on pause for now, at least until the signatures of the petition are verified, and likely until Nov. 2024, following a lawsuit by the Save Local Restaurants Coalition and subsequent injunction hearing in their favor.
The coalition, comprised of the National Restaurant Association, U.S. Chamber of Commerce and the International Franchise Association, filed a lawsuit on Dec. 30 to prevent the law from going into effect on Jan. 1, after the coalition received enough signatures (over one million) to send the legislation to a referendum vote in Nov. 2024.
Hear more from Joanna Fantozzi
Crumbl Cookies has grown to just over 700 locations nationwide, a swift and sizable number given its short, 6-year history. Despite that growth, its runway remains long given that industry giants like Domino’s and Taco Bell are about 10 times its size.
Its potential is even greater considering its digital footprint. Though significantly smaller than most legacy brands, Crumbl Cookies is a digital juggernaut. In fact, the concept has the No. 6 most downloaded app in the food and drink category in Apple’s app store – ahead of giants like Domino’s, Taco Bell and Chipotle. The app was downloaded 500,000 times alone in December, according to SensorTower.
Its underdog status extends to social media, where Crumbl has a whopping 6.4 million followers on TikTok and 3.3 million followers on Instagram. For context, McDonald’s, Taco Bell and Chipotle each have less than 3 million TikTok followers, while Taco Bell and Chipotle each have less than 1.5 million Instagram followers.
At the start of 2023, we’re starting to sense a theme in restaurant industry equipment and technology news: AI and labor solutions. In a post-pandemic economy, labor is still challenging (though slowly improving) and restaurants are looking to automate menial work to encourage longer employee tenure. We’ve already spoken at length about robot servers, fry cooks and tortilla fryers, but what about robot dishwashers? Nala Robotics is introducing this new technology
In other news this month, Toast continues to integrate with more technology startups, BurgerFi is turning to in-car ordering to increase omnichannel access, and more.
Tech Tracker rounds up what’s happening in the technology sector of the restaurant industry, including news from restaurants, vendors, digital platforms, and third-party delivery companies. Here’s a breakdown of what you need to know and why.
New data from the National Restaurant Association shows that restaurant sales in December tapered off in December – to $88.3 billion – compared to November, which generated $89.2 billion. The association reports that October and November sales were $1.6 billion lower than preliminary numbers shared by the U.S. Census Bureau.
This drop is a bit of a shift from months prior when industry sales were largely lifted by higher menu prices. Adjusted for inflation, sales at eating and drinking establishments in December represented the lowest monthly volume since March. The shift may indicate that consumers have reached their pricing threshold as they continue to manage their own pressures.
Taco Bell relaunched wings for a limited time.
The wings, which come in a group of eight and are coated in queso seasoning, were last seen on the menu for a brief time last January before selling out. The wings cost $6.99.
There’s also a combo meal called the Gameday Box. It includes eight wings, four crunchy tacos, and one traditional Mexican Pizza and will be available from January 26 through February 9. The box costs $22.
The holiday lull was kind to Pizza Hut, which experienced a nearly 30% increase in visits during the last week in December (week-over-week) and a 15.3% increase in visits the first week in January (year-over-year), according to new data from Placer.ai.
This data bucks the overall trend in the restaurant industry, which showed a 4.2% decrease in traffic year-over-year in Q4, according to data from Revenue Management Solutions.
There are several factors working in Pizza Hut’s favor of late. To learn more about them let’s turn to Alicia Kelso.
In-N-Out Burger is expanding into Tennessee and opening a territory office just outside of Nashville, the Baldwin Park, Calif., restaurant chain announced on Tuesday.
This will be In-N-Out’s first foray into Tennessee, the furthest east the West Coast chain has ventured. It already has units in California, Nevada, Arizona, Utah, Texas, Oregon, and Colorado.
The brand, which is consistently ranked as consumers’ most-craved brand in NRN’s annual Consumer Picks survey, will celebrate 75 years in October.
In-N-Out plans to open its first Tennessee location by 2026. The new territory office will be in Franklin, Tenn.
You only have to look at the plethora of ‘90s and ‘00s television reboots hitting cable and streaming services to see the hold that Millennium-era nostalgia has over the current cultural zeitgeist. Last year, Taco Bell banked on the power of the reboot (especially with social media buzz) when the quick-service brand brought back Mexican Pizza as an LTO, and then thanks to outcry over product shortages and celebrity influence from Doja Cat, added the ‘90s favorite to the menu permanently.
Although Taco Bell is known for its buzzworthy product callbacks, the quick-service brand is not the only Yum Brands company to do so. In October, KFC brought back an updated version of its chicken Twister wraps after being discontinued for eight years.
Now Pizza Hut is getting in on this strategy with the return of The Big New Yorker Pizza announced Wednesday, which was first introduced in 1999 and retired two decades ago. The 16-inch pizza — topped with extra cheese, sweet marinara sauce, parmesan-oregano topping and double pepperoni — returns Feb. 1 as an LTO and is reminiscent of Pizza Hut’s menu items of the brand’s red roof days, which slowly closed over the years.
The ICR Conference was this week and the NRN editors were on hand to cover it all. Restaurant brands from Shake Shack to BurgerFi to Red Robin all presented during the conference and we got deeper insight into what these companies have planned for 2023. Here are some of the highlights:
· Digital menu boards are popping up everywhere;
· Kiosks will be even an bigger deal than they already are;
· Restaurants will return to growth mode this year, whether through a five-point plan or adding more units; and
· There is optimism in the industry.
For more of our ICR coverage check out the below stories and listen to today’s episode of First Bite.
· How Red Robin is positioning itself for a comeback
· Denny’s focuses on staffing, return to all-day hours and value
· How Dutch Bros grew traffic without depending on price increases
· Kura Sushi is starting to realize the benefits of scale
· Shake Shack is optimistic as sales and margins improve
· Portillo’s newer markets are outpacing its core Midwest restaurants
· With a strong menu in place, Noodles & Company to focus on digital innovation
· BurgerFi looks to acquire more brands after successful Anthony’s brand merger
· Jack in the Box sets sights on refranchising, tech improvements
· Why El Pollo Loco executives are bullish about 2023
Restaurant franchising isn’t just an option for older, second-career entrepreneurs. Increasingly, franchising is becoming younger and more diverse, helping to evolve the model beyond its traditional roots.
NRN spoke with a diverse group of restaurant franchisees under the age of 40 about their careers and ambitions, and discussed why more restaurants should encourage young, female and diverse business owners to start franchising.
Now let’s hear more behind the story with Joanna Fantozzi
By many accounts, alcohol consumption spiked at the onset of the pandemic. But now, as consumers are settling into a somewhat new way of life that includes a greater focus on health, they’re seeking beverages that are better for them, or at least free of alcohol.
A survey released by Gallup in August 2021 reported that 60% of American adults say they drink alcohol, down from 65% in 2019, and the lowest level since 2012.
Restaurants are responding with beverages that don’t have booze but are nonetheless bursting with flavor and visual appeal — beverages like soft drinks — and their guests are responding by drinking them.
Charlotte, NC’s zoning board unanimously approved making one local Chick-fil-A drive-thru only on Thursday after customers started a petition in response to the chain’s long wait times and disruption to local traffic.
The proposal would tear down an existing Chick-fil-A and rebuild it as a drive-thru-only location. The next step is for the proposal to be brought to the City Council for a final vote.
If passed, the owner of the property is willing to contribute $70,000 to new traffic signals; the entire project is expected to take six months.
There are currently no drive-thru-only Chick-fil-A locations across the country.
A new survey from the National Restaurant Association finds that operators have a mixed outlook for 2023, which is not all that surprising given the relentlessly bumpy macroeconomic environment throughout much of 2022.
Much of what is keeping operators up at night are food and labor costs; 92% say food costs are a significant challenge, while 89% say the same about labor costs. The Producer Price Index for all foods increased 18 out of the last 23 months, while some commodity prices jumped by double digits. Coffee and egg costs, for instance, contributed to a 30% jump in breakfast inflation during 2022, according to David Maloni, principal at Datum FS.
Now let’s turn to Alicia Kelso for more on the story.
Walk-On’s Sports Bistreaux announced Wednesday the promotion of Scott Taylor from COO and president to CEO, after twelve years at the company. Taylor will be taking the helm from the company’s founder, Brandon Landry, who will transition to chairman of the board of directors. In an exclusive interview with NRN, Taylor discussed his ambitions for Walk-On’s, including franchising expansion goals, and continuing to transition to a more tech and menu innovation-focused future.
Get a behind the scenes look at the interview and learn more about the chains’ plans with senior editor Joanna Fantozzi.
During the last week of 2022, Starbucks announced some upcoming unpopular changes to the coffee giant’s popular rewards program, effective Feb. 2023, which many U.S. and Canadian customers saw as an in-app notification or via email.
According to Starbucks, the changes to the rewards structure — which were also confirmed in an internal memo viewed by Business Insider —would double the amount of stars it takes to get a free hot coffee from 50 stars to 100, and increase the amount of stars it would take to receive a free handcrafted beverage, including lattes and Frappucinos, from 150 stars to 200 stars. The former 200-star tier, for which customers could redeem for a free packaged salad, sandwich or protein box, will now cost 300 stars.
However, in good news for customers, iced coffee beverages (not including cold brew) will now be worth 100 stars, down from 150 stars and packaged coffee is now included in the 300-star tier, after formerly belonging to the top 400-star tier. Certain merchandise items like select to-go cups will now be worth 100 stars, down from 200 stars
New data from Alignable finds that 52% of independent restaurant owners couldn’t afford to pay December rent, up 10% from November’s numbers and marking the highest level in 2022. Small restaurant owners are struggling more than the average small business, with overall rent delinquencies for December at 40%.
This is a stark trend versus last December, when just 26% of small businesses couldn’t pay rent. It’s also an increase from previous months; in October, 49% of restaurant owners couldn’t pay rent, while in September, the number was 36% and in August and July, the numbers were 46% and 45%, respectively.
Typically, the fourth quarter tends to yield the opposite trend for small restaurants as more people are out and about shopping and celebrating, but a confluence of pressures – including higher rent and declining revenues – have taken a toll this year. Fifty-two percent of small business owners say their rent is higher than it was six months ago. Additionally, 64% of small businesses said consumer spending was lower than it was in November.
Optimism has taken a hit as well, with nearly 80% of small business owners worried about rising interest rates. The U.S. Federal Reserve recently raised interest rates another half point to help combat relentless inflation and those rates are now at their highest level in 15 years. More increases are expected this year, according to the Wall Street Journal, impacting small business owners’ ability to borrow, invest or grow.
Learn more from executive editor Alicia Kelso.
The year was a slightly calmer year than usual for mergers and acquisitions in the restaurant industry, with 22 such deals having been made, but that doesn’t mean it was any less interesting than years past.
The year was bookended with huge acquisition deals: The Jack in the Box purchase of Del Taco, first announced in 2021, was finalized in the first quarter; then just this week, Dine Brands Global announced its acquisition of Fuzzy’s Taco Shop.
In between, the industry saw a lot of acquisitions of smaller, emerging chains, as well as mergers to bring those brands together. Groups of fast-casual restaurants are popping up all over the place, with WOWorks building up to six brands this year and Modern Restaurant Concepts teaming up with Qdoba. This trend makes sense as a recession looms in 2023, and smaller chains will take any help they can get.
Elsewhere in the industry, Dave & Buster’s acquired Main Event; BBQ Holdings acquired Barrio Queen before being acquired itself; and Denny’s picked up a smaller breakfast chain in Keke’s Breakfast Café. Plus, DoorDash acquired startup ordering and payment solutions platform Bbot.
This week we saw two major acquisitions to close out the year, Freshii was acquired by franchisor Foodtastic and Rusty Taco was acquired by Gala Capital, sold off from Inspire Brands’ portfolio.
After closing dozens of restaurants over the past couple of years, struggling Canadian fast-casual chain Freshii is being acquired by restaurant franchisor Foodtastic for $2.30 per share or $74.4 million. The all-cash acquisition of the struggling healthy food concept is expected to help grow and improve the profitability of Freshii.
On the other hand, Dunkn’ and Sonic Drive-In parent company Inspire Brands announced Monday the sale of fast-casual brand Rusty Taco to Californian private investment firm Gala Capital Partners. The terms and price of the brand’s acquisition were not disclosed, though the Rusty Taco management team, including president Brendan Mauri, invested in the acquisition and will also stay onboard as part of the team.
Inspire Brands initially acquired a controlling interest in Rusty Taco in 2018 as part of its purchase of Buffalo Wild Wings and grew the brand 50% over the past four years.
Now let’s hear more from senior editor Joanna Fantozzi.
While 2021 was the year we were introduced to AI voice ordering in the drive-thru lane, 2022 became the year we started seeing the labor-saving technology everywhere. As it turns out, 2023 is likely going to be the year that AI voice technology is improved and perfected. For this month’s Tech Tracker column, Joanna fantozzi spoke with Soundhound about the tech company’s latest audiovisual AI technology for food ordering that more easily understands natural cadences of human speech. The goal? Less friction and frustration in the drive-thru lane as customers struggle to get a robot to understand their lunch order.
As labor continues to be a pain point for the restaurant industry, more operators are investing in AI and automation technology to alleviate some of that stress. Over the past couple of years, we’ve seen White Castle, Panera, McDonald’s, Sonic, and more invest in voice ordering AI for the drive-thru to improve speed and efficiency. But the technology still has a long way to go and is imperfect in understanding human dialect, slang and speech cadence.
Learn more from Joanna ahead.
Today, we’re talking about Yum Brands.
Yum Brands, parent company of KFC, Taco Bell, Pizza Hut and The Habit Burger Grill, held its annual investor day last week in New York City and it’s hard to imagine a more confident company right now. Executives touted their diverse portfolio and scale as providing a major advantage against a relentlessly uncertain economic backdrop and presented several examples to support their case.
KFC, for example, is testing several technologies worldwide to create more consumer access and ease operations, and Taco Bell’s CEO Mark King said that chain has big opportunities to grow its lunch and breakfast day parts, and its footprint, to be on par with McDonald’s.
Here to share her key takeaways from Yum Brands’ investor day is executive editor Alicia Kelso.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Today, we’re talking about breakfast.
Nationwide, restaurant chains committed to the earliest daypart are popping up left and right. While stalwarts like IHOP and Denny’s have long thrived in the breakfast/brunch segment, smaller emerging chains are staking their claims — and thriving — in the space. Keke’s Breakfast Café, for example, was purchased by Denny’s this year and is relying on its consistency as it expands. First Watch had arguably one of the industry’s most successful IPOs in 2021. And Toasted Yolk has ambitions to become the largest restaurant brand in the United States — and not just in the breakfast space.
Nation’s Restaurant News talked to leaders at 10 of the most dynamic breakfast chains in America right now, and you can learn about them below. Over the coming weeks, we’ll ask you to choose: Who do you think has the most exciting breakfast/brunch concept? Cast your vote on Instagram and LinkedIn. Here to talk more about the showdown is NRN’s editor-in-chief Sam Oches.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we’re talking even more about predictions.
A lot of crystal balls come out this time of year and they often display an intriguing forecast of what’s to come in the near term. For the restaurant industry, many of the recurring images appearing in those crystal balls have to do with technology.
According to Datassential’s 2023 predictions, for example, artificial intelligence will have a “huge” impact on the industry, not just by helping to develop new items but also by easing the continuing labor shortage. Chef Tom Aviv is an example of the former, having recently debuted a restaurant in Miami that uses DALL-E (AI) technology to help create the menu.
Executive editor Alicia Kelso is here to tell us more about tech-themed predictions for 2023.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Today, we’re talking about the future of restaurants: a future where your digital footprint is more crucial than your physical entryway, where customers expect online hospitality to be just as (if not more) easy to use and as convenient as in-person dining, and where every operator knows more than just your name. Essentially, restaurants must be “everything everywhere all at once” to customers who have become used to an on-demand economy, thanks to tech giants like Amazon, Google and even Netflix.
It might sound harsh, but the days of mom-and-pop restaurant operators being able to rely on word of mouth for marketing and resisting digital investment because they “are food experts, not tech/social media experts” are over.
While at first experts predicted that the end of the COVID-19 pandemic would bring about the end of the traditional restaurant experience as we know it, with dining-in becoming the new dining-out, this proved not to be the case. Instead, customers keep wanting more from restaurants. They want operators to offer everything: classic dine-in, easy and flexible online ordering and delivery, and personalized experiences like customizable rewards based on their purchasing habits and subscription programs. They want the omnichannel experience, which has been the hospitality buzzword of 2022.
Senior editor Joanna Fantozzi joins us to talk about what technology experts think digital innovation inside the restaurant of the future might look like.
Today, we’re talking about gift cards. MrBeast burger announced earlier this month that it is adding a gift-card program to its quickly growing restaurant business, illustrating just how important it is for restaurants of all kinds to have a gift-card program in place now. That is especially true during the holidays, when the industry sells a majority of its gift cards for the year. According to Credit Suisse, the average casual restaurant generates more than half of its annual gift card sales in Q4, and nearly 40% of redemptions happen in Q1.
This isn’t necessarily a new trend. What is new, however, is that the promotional push has become a bit more aggressive in the past three years as restaurants diversify their revenue streams amid crises. Further, that promotional push has largely come via ecommerce channels as consumers have become more digitally dependent. Consider Paytronix data, for instance, which found that gift card sales on Cyber Monday jumped nearly 14% and 18% in overall dollar sales. Digital cards experienced a 31% increase over 2021.
Senior editor Alicia Kelso joins to talk about this pattern.
Today, we’re talking about Taco John’s — the 370-unit, Wyoming-based “West-Mex” quick-service chain — which is launching menu items including a flat, crunchy tostada topped with shredded, lettuce, pico de gallo, and two types of cheese. It reminds us of a more refreshing, remixed version of a Mexican pizza from that otherquick-service Mexican chain.
But while it might be tempting to compare the growing mid-sized brand to its national competitors, Taco John’s is carving out a corner of the market share all on its own with innovative menu items and a brand refresh as the mainly Midwest chain looks toward the future.
NRN senior editor Joanna Fantozzi recently visited the new second headquarters of Taco John’s in Minneapolis, Minn., where a rebranding of the company is underway. From new colors that will dominate the upcoming store designs (a cheery red, green and yellow), to a stronger emphasis on menu innovation and technology investment, the Taco John’s makeover signifies the company’s path forward into new markets and stomachs.
Today, we’re talking about three multi-brand operators who recently discussed the key factors they consider when expanding their portfolio, including geography, unit economics and the brand’s leadership team.
The portfolios of multi-brand franchisees The Falcons Group, WarnerFoods and The Hari Group are as diverse as they come. The Falcon’s Group, for instance, includes Checkers & Rally’s, Baskin-Robbins and TGI Fridays and the company just added Twin Peaks.
WarnerFoods’ roster includes Jack in the Box, Black Bear Diner, Panera, Noodles & Co. and Popeyes, while The Hari Group operates Dunkin’, Dave’s Hot Chicken, McAlister’s Deli and Currito.
Each company provides a case study on how to strategically grow and what to look for while doing so – an important lesson as scale becomes more important in a persistently challenging environment.
Hear more from executive editor Alicia Kelso.
Starbucks has finally launched a beta version of its metaverse — the Starbucks Odyssey — on Dec. 8 after initially announcing the Web3 experience in September. Although restaurants have been dipping their toes and marketing budgets into the metaverse all year, it feels like the party is just getting started now that one of the biggest foodservice companies in the world has joined in.
This is why our senior editor Joanna Fantozzi thinks Starbucks was smart to wait more than a half a year after some of its industry colleagues to join the fray. Rather than limit the size of its potential audience by requiring extra equipment or an understanding of Bitcoin and NFTs, Starbucks has broadened its potential userbase. NFTs have been rebranded as “Journey Stamps” and cryptocurrency is not required to purchase and trade them. The coffee chain also has borrowed from the familiar structure of a rewards program by allowing customers to rack up points as they purchase and trade NFTs. Points can then be redeemed for in-store experiences.
But make no mistake: the metaverse space is still the Wild West of the Internet 3.0, and likely will be for a long time to come. At this point, we’re still defining and refining exactly what the metaverse is. The first retail and foodservice brands to join the trend required both a compatible virtual reality headset, as well as knowledge and ownership of cryptocurrency. To play basketball with the Wendy’s Baconator in the Wendyverse, for example, you have to own a Meta Quest 2 headset.
Hear more from Joanna.
Uber Eats agreed to pay the city of Chicago $10 million as a legal settlement for listing Chicago restaurants in both Uber’s and Postmates’ apps without the restaurants’ consent, according to reporting from the Chicago Tribune on Dec. 5. The legal agreement is the result of a two-year investigation into Uber’s practices and the company was found in violation of Chicago’s emergency fee cap ordinance, and other advertising-related conduct, according to a press release from Chicago Mayor Lori Lightfoot’s office.
Under the settlement terms that began last year, Uber had to pay $13.3 million to restaurants that were charged outside of that 15% fee cap and will have to pay an additional $2.25 million to restaurants for the same reason moving forward. In 2021, Uber had removed all restaurants that had not expressly agreed to be listed on the platform from both Uber Eats and Postmates, and will pay $3 million to restaurants that were listed without permission in total to restaurants. Uber will also pay $1.5 million to the city of Chicago to cover costs and fees of the investigation.
The California FAST Act — the controversial legislation passed by the state in Sept. that would create a council to regulate the fast-food industry — has been put on hold for now. The Small Restaurant Coalition, led by the National Restaurant Association, received more than a million signatures –enough to send the legislation to a referendum vote, which will take place in Nov. 2024.
The FAST Recovery Act or Assembly Bill 257, was signed into law by California Gov. Gavin Newsom on Labor Day and was designed to give fast-food employees a seat at the table. The Governor would be in charge of creating a 10-person council that would set standard wages, working hours and conditions for employees of quick-service chains with 100 or more locations nationally.
That council would have the ability to raise the minimum wage for workers to $22 an hour. And although the council’s jurisdiction would technically only extend to the quick-service restaurant industry, according to a previous interview we did with Riley Lagesen, an attorney at Greenberg Traurig, the competitive market would ensure that nearly every industry statewide adjusts their wages accordingly. It would also be highly likely that the legislation would be copied in other industries and across other cities and states.
Hear more from senior editor Joanna Fantozzi.
In the casual dining segment, it doesn’t get more legacy than Dine Brands Global. The company owns both IHOP, established in 1958, and Applebee’s, founded in 1980.
So, the company’s acquisition of 19-year-old fast casual concept Fuzzy’s Taco Shop today may seem a little out of place on paper. But that’s hardly the case. According to Dine Brands CEO John Peyton, the addition of Fuzzy’s perfectly fits the company’s strategy to accelerate its growth over the long term.
Fuzzy’s should indeed contribute to Dine Brands’ long-term growth. The Mexican fast casual brand generated approximately $230 million in systemwide sales in 2022 and currently includes nearly 140 units across 18 states, with more than 125 units in the pipeline. Peyton said there is significant potential to take Fuzzy’s from a regional to a national brand and it plans to do so through its heavily (98%) franchised model. That model is what Peyton called the “sweet spot,” for the acquisition.
Hear more on this deep dive from Alicia Kelso.
Greg Levin was named CEO of BJ's Restaurants in the summer of 2021 during perhaps the most disruptive time for the casual dining segment in its history.
Those uncertainties have only grown since, given inflationary and supply chain challenges, as well as a predicted recession on the horizon. Still, BJ's system sales and comp sales exceeded pre-pandemic levels in Q3. Though margins remain pressured (BJ’s is not anomalous here), Levin and his team have put several initiatives into place to maintain the 214-unit chain’s momentum – uncertainties be damned. Take, for instance, the company’s recently-created margin improvement team featuring representation across several functions to actively identify and implement cost savings opportunities, some of which are low-hanging fruit and others that have long-term implications. The team focuses on four areas specifically – cost of sales, labor, operating occupancy and G&A. The ultimate goal is to bring margins back into the mid-to-upper teens, while maintaining quality and portion sizes.
Hear more from executive editor Alicia Kelso.
While Lekka Burger — the plant-based burger concept helmed by South African humanitarian Andrea Kerzner and Amanda Cohen, executive chef of Michelin-starred Dirt Candy — opened its first location in New York City in 2019, the hype for the chef-driven vegan burger joint was drowned out by the pandemic hitting the city just four months later.
Now, Lekka Burger is starting to pick up momentum with the opening of the concept’s second location inside the Urbanspace food hall in Midtown East. Although the vegan burger space is starting to become crowded with new, buzzworthy concepts, Kerzner started out with the simple goal of standing out from the crowd with a chef-created burger that was not made with Impossible or Beyond patties.
Let's hear more from Joanna Fantozzi about Amanda Cohen entering the plant-based war.
While Domino’s and Papa Johns often get the largest share of ‘pizza wars’ media analysis, Little Caesars is actually still firmly the third-largest pizza chain in the U.S. and has a lot of long-term development goals in the works. NRN spoke with Little Caesars chief development officer Jeremy Vitaro, who joined the team last year, about the company’s progress in technology innovation, and menu and marketing development. He particularly thinks the company has a real opportunity during these times of economic uncertainty as a more affordable option.
Hear more about what he had to say in a conversation with Joanna Fantozzi and her thoughts on the matter ahead.
Norman Wu isn’t just out to build a restaurant empire, he’s out to do it consciously. So much so that he even named his restaurant company, parent to his legacy brand Just Poké, Conscious Hospitality.
“We are building out restaurant concepts that keep in mind an ethos outside of just kind of making money,” Wu said in a recent episode of Take-Away with Sam Oches.
That includes the takeout containers, the building of the restaurant, the materials used for the build, the sourcing of products, and the career development of employees at the restaurant.
The restaurant group is working toward “building a framework for the team that can really allow for people to have careers [at Just Poké], as opposed to just a job.”
That’s just part of it. The team at Conscious Hospitality pays about 30% above minimum wage and has offered healthcare to workers since its inception.
To offset those costs, Wu said that the costs of their fast-casual menu are a bit higher than competitors, but that the Seattle-based customers really appreciate what they’re providing employees and customers are “voting with their dollars.”
Hear more from editor-in-chief Sam Oches.
Just before the Thanksgiving holiday, the U.S. Small Business Administration announced that the government agency would be distributing $83 million in unobligated Restaurant Revitalization Fund money to 169 restaurant operators with pending RRF applications.
Over the summer, NRN reported on an independent audit by the U.S. Government Accountability Office that found the SBA was sitting on $180 million of unobligated Restaurant Revitalization Fund money. At the time, the SBA said that they planned to distribute the funds with help from the Justice Department, though no further details were available.
Earlier this month, the SBA provided an update that no further applications were needed, and funding would be distributed soon on a “first-applied, first-serve basis.”
According to the National Restaurant Association, the previous estimate of $180 million in leftover funding was inaccurate, and the $83 million represents the last of the RRF funding that any restaurant will ever see.
Grants will be distributed in the order in which applications for the original RRF grants were received last year, starting this week. Operators will have until March 2023 to spend the money.
Find out more on this story from senior editor Joanna Fantozzi.
Adam Goldberg grew up a “huge rock and roll fan” with a Kiss poster on his bedroom wall, so it’s a bit poetic that he is now the CEO of Rock & Brews, a casual dining chain founded in 2012 by Kiss' flashy front men Paul Stanley and Gene Simmons, among others.
Goldberg, a restaurant veteran who co-founded Fresh Brothers Pizza, took the helm four years ago. He just so happened to live down the street from the Rock & Brews headquarters in California and knew the founding partners well – including Michael Zislis and Dave and Dell Furano – through community outreach efforts both of their restaurant brands facilitated. When Rock & Brews hit some stumbles, including a franchisee’s bankruptcy, the partners asked Goldberg to look at the books and he’s been running the company ever since.
It wasn’t necessarily a plan he anticipated. But there’s some serendipity at play he couldn’t ignore – the rock and roll, the location, the familiar faces, the restaurant industry.
Learn more about the concept and its plans for growth in the years ahead from Alicia Kelso.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we’re talking about loyalty.
In the face of relentless inflation and an impending recession, loyal customers are more valuable to restaurants than ever. Chains are responding accordingly, implementing and upgrading their loyalty programs. The digital revolution has also opened up new opportunities for loyalty marketing beyond the old standard of punch cards. Restaurants can also collect more data on customers through apps and digital loyal programs.
Hear editor-in-chief Sam Oches describe the engaging, innovative loyalty programs that restaurants are rolling out these days.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we're talking about the Restaurant Development and Finance Conference.
A few overarching themes emerged, and none of them should be a surprise to anyone in the restaurant space.
To summarize, things are challenging right now with across-the-board inflation, supply chain pressures, labor pressures, name it. One operator said he wouldn't recommend anyone open a restaurant until "things get better."
That said, there is optimism things will get better. When, however, is the million-dollar question.
Here to share her observations from the conference is executive editor Alicia Kelso.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Turkey prices are rising. The bird flu has driven prices up during a year that inflation has already caused prices at the grocery store to rise. That leaves restaurants at an interesting spot during Thanksgiving. Many have turned to value propositions for customers to draw them in at a time when the grocery store is just unreasonable or unattainable.
Hear more on this upcoming story on nrn.com from Alicia Kelso.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Today, we’re back with part two of our Tech Tracker roundup on restaurant technology.
Last month, Lunchbox and Thanx unveiled the latest version of their suite of tech capabilities for restaurants, with the former focusing on online ordering integration, and the latter focusing on the next wave of digital loyalty programs.
Meanwhile, Pepsi is making its mark on the virtual restaurant industry more lately. PepsiCo Foodservice just announced that it will be rolling out a ghost kitchen tool for restaurants that will help operators be able to “seamlessly enter the ghost kitchen space,” leveraging the company’s resources, as well as its suite of Pepsi brands.
Finally, a piece of news that broke too late to make our written roundup: Squarespace announced Wednesday that Tock founder and CEO Nick Kokonas will be stepping down from the reservations platform he built eight years ago. Kokonas — who sold Tock to Squarespace in 2021 — will leave the company effective Jan. 2, 2023 and will be replaced by former Olo chief operating officer, Matthew Tucker.
Senior technology editor Joanna Fantozzi is here to explain what all this technology news means for the restaurant industry at large.
As customers demand more digital technology engagement from their favorite restaurants — even neighborhood spots — tech vendors are rapidly adding more bells and whistles to their repertoire to keep up with changing consumer needs.
This month, two digital tech upstarts — Lunchbox and Thanx — have released new versions of their online ordering and loyalty software and are well on their way toward becoming end-to-end solutions for operators. While we can’t advise operators on how to build their tech stack, we can break down how these new features work.
Speaking of tech platform upgrades-- several third-party companies are adding reservation capabilities to their repertoire, including DoorDash and Uber, plus Pepsi is rolling out ghost kitchen tool capabilities, begging the question: “just how many companies are trying to cash in on the burgeoning digital tech solutions industry?”
Tech Tracker rounds up what’s happening in the technology sector of the restaurant industry including news from restaurants, vendors, digital platforms, and third-party delivery companies. Here’s a breakdown of what you need to know and why:
Uber, DoorDash and SpotOn are now taking restaurant reservations
In the restaurant tech world, keeping up with Joneses has come to mean “make sure you’re adding the same features as your competitors.” This month, three different tech platforms added reservation-making capabiliti
Less than two months after it was announced, the first bar concept from restaurateur Sam Fox, Pushing Daisies, will open in Nashville on Nov. 17.
Inspired by Mexican speakeasies and located beneath Fox’s restaurants The Twelve Thirty Club and Blanco Cocina + Cantina, Pushing Daisies will serve variations on the margarita — including a shared punch-bowl version — agave-based cocktails and “drinking snacks.”
While Fox Restaurant Concepts (FRC), which was acquired by The Cheesecake Factory in 2019, has 75 units of over a dozen brands, Pushing Daisies is the company’s first bar-only concept.
Hear managing editor Leigh Anne Zinsmeister explain this new concept which she experienced first-hand on a trip to Nashville for the opening.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
On Tuesday, Sweetgreen finally opened its first drive-thru, the Sweetlane. The Sweetlane provides customers a chance to pick up their orders through a drive-up window, with no ordering window at all. All orders at this location are made ahead of time, and there’s no makeline. This is a revolution for Sweetgreen, one of the pilots of the makeline along with Chipotle Mexican Grill. Guests can watch their order being made at an observation window built into the building. Dine-in and pick-up are also available inside the restaurant, and it has outdoor seating.
To learn more about this and other prototypes in the works from other restaurant companies, listen to me explain it all.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Get ready to meet our Brand Icon! This new annual title is given to a brand selected by the Nation's Restaurant News editors that is cementing its legacy even as it pushes the envelope in innovation. We tour their headquarters and provide a behind-the-scenes look at both the history and the present day life of the company. Meet this year's Brand Icon, White Castle, in this exclusive podcast.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Earnings time is like Christmas for financial analysts and for restaurant reporters as well. It’s a time when restaurants report their earnings, and we get to cover an endless stream of quarterly statements from brands who have either done well or not so well over the past three months.
During the third quarter of this year, we saw trends emerge, like we previously talked about with Alicia Kelso about chains returning energy to the city, among others that I won’t spoil for you in this episode featuring managing editor Leigh Anne Zinsmeister.
So, stick around for our learnings from the third quarter earnings report from restaurants.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
While many Congressional races are still tight in some states, voters made major decisions on tip credits, minimum wages, and labor organization across the country. Here are the ballot measures results you should know about, and how the restaurant industry is reacting straight from senior editor Joanna Fantozzi.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
2021 was a great year for the coffee/bakery restaurant segment, with all of the 10 biggest chains seeing an increase in systemwide sales — some as high as 55.7%.
In the annual Top 500 report, powered by Datassential, Nation’s Restaurant News breaks down the 500 biggest restaurant chains in the U.S. by systemwide sales, domestic units and average unit volumes. The full data also identifies chains by segment, so here we’ve broken out the 10 biggest coffee/bakery chains by U.S. systemwide sales, out of 24 that appear on the full list.
Following the worst of the pandemic, the segment came roaring back in 2021 as consumers returned to their offices and, therefore, their routines. Of the 24 total coffee bakery chains in the Top 500, only five saw systemwide sales decline last year.
Of the Top 10, only one chain differs from the 2020 list, with a growing brand swooping into the rankings at No. 8, replacing Daylight Donuts, which fell to No. 11.
I sat down with managing editor Leigh Anne Zinsmeister over coffee to discuss, what else, coffee chains. Listen to our conversation here.
Urban markets have long been an important lifeline for restaurants because they generate a consistent traffic flow, particularly during the critical lunch and dinner dayparts. Further, they tend to complement other urban businesses, creating a compelling destination for economic activity.
Of course, that activity went away in 2020 and then stalled again in 2021 with the delta and omicron variants. But now a comeback seems to be underway, and restaurants with a strong urban presence are experiencing some momentum accordingly. Consider Shake Shack, for instance, which calls New York City its hometown. The city’s office occupancy rates increased by more than 10% in September – the highest point since the pandemic began – and that trend has played a major role in the chain’s continued recovery.
Hear more about the urban revitalization from Alicia Kelso.
McDonald’s first started testing self-service kiosks in 2003 – an ice age ago in tech terms. But it took quite some time for the technology to prove its return. In fact, the McDonald’s U.S. system didn’t implement kiosks systemwide until 2020.
Taco Bell also pressed the gas on kiosks in 2020 and even introduced a kiosk-only Cantina model last year. The technology is expected to play a big role as the chain works toward its 50% digital sales mix goal. Panera was a few years ahead on kiosk integration, and has since made them a focal point of its new digital-only formats.
With heavyweights like McDonald’s, Taco Bell and Panera proving the value of self-order kiosks, the slow trickle that began in 2003 seems to be accelerating into a steady stream at larger chains. This is evidenced from the past few rounds of earnings calls, including Shake Shack’s Q3 call Thursday, in which CFO Katie Fogerty said kiosks are the chain’s most profitable channel, yielding higher check sizes, higher margins and better labor utilization.
That labor utilization piece is particularly critical now, as the industry remains about 500,000 employees short of pre-pandemic numbers.
Learn more from senior editor Alicia Kelso.
After Papa Johns had seemingly taken the top performing pizza chain spot from the indomitable Domino’s this year, the company reported negative sales and revenue for the third quarter ended Sept. 25, 2022, following 12 straight quarters of outperformance. Comparatively, Papa Johns’ competitors, Pizza Hut and Domino’s both reported positive same-store sales growth, of 1% and 2% respectively, despite the staffing challenges the restaurant industry continues to face.
So, what’s to blame for the same-store sales slowdown of -1% and revenue decrease of $2 million? The challenging macroeconomic climate might have contributed to the less-than-ideal financial results in a more roundabout way. Papa Johns has always differentiated itself among its competitors as the premium pizza brand, with more of a focus on overall value than discounting. But with inflation and the uncertainty of a possible recession on the horizon, customers are spending less on restaurants and takeout.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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From value to cleanliness to loyalty, our 2022 Consumer Picks Report in partnership with Datassential covers it all. Each year, Datassential surveys consumers on topics ranging from ambiance to take-out food to register which chains rank at the top. This year, we decided to pull apart the data in a way we never have before into individual galleries and analyze the data in separate deep dives, all done by managing editor Leigh Anne Zinsmeister. Hear more from her on her investigation ahead.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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The Restaurant Revitalization Fund was all anyone could talk about for months when the pandemic started. It became a major lifeline for struggling restaurants who couldn’t receive Paycheck Protection Program loans. Then it ran out of funds. A second round of RRF funds were voted on and rejected by Congress, leaving struggling restaurants stranded without a lifeline.
Turns out, that wasn’t the case.
During an investigation this summer, an independent body found out that $180 million in funds hadn’t been distributed from the original RRF. While that may seem like a lot — and will make a substantial difference for many restaurants when and if it is eventually distributed — it’s only 1% of the money the fund held initially.
Here’s Joanna Fantozzi with some breaking news on the RRF front and a much-needed update.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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At the height of the pandemic when dining rooms were closed, the phrase “ghost kitchen” entered the public lexicon and new “hot” delivery-only concepts opened their hidden doors almost every day.
But as the post-pandemic dust settles, the off-premises restaurant industry is evolving beyond the rush of flash-in-the-pan celebrity-backed chicken nuggets concepts. Virtual restaurant companies are in it for the long-haul: they’re stepping out of the dark kitchen’s shadows to combine off-and-on-premises experiences, and many are avoiding the phrase “ghost kitchen” altogether.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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As suspected, restaurants have been responding to rising costs and staffing shortages by cutting hours, according to new data from Datassential. The new research surveyed restaurant hours nationally and found that the average restaurant is now open for 6.4 fewer hours per than it was three years prior, which points to a decline of roughly 7.5%.
While this data might sound alarming, it is not particularly surprising given the challenges restaurants still face in a post-pandemic world and how the industry landscape has changed dramatically since the “before times.” According to Datassential, there are multiple factors even beyond dwindling employees that have forced the change in operating hours. Demand for in-person dining has declined since the pandemic and people are home more often than ever before, thanks to two years of lockdown habits and a shift to a work-from-home model.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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The three-course meal and the three-meal day still have their part to play in nourishing Americans, but increasingly consumers are spreading out their eating to suit their evolving needs. A breakfast flatbread with a mimosa at 10 a.m. after the morning Zoom meetings, a 3 p.m. snack of cold cuts and cheese puffs while socializing with friends over beer after a short day working from home, and late-night tacos after a long day working from home to make up for that short one are increasingly replacing breakfast, lunch and dinner.
The daypart is dead and Bret Thorn has more to say about it.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Starbucks announced Tuesday that another New York City Reserve store is opening on Nov. 16 inside the Empire State Building. Like many of the other Reserve locations, this 23,000-square-foot, three-floor store will feature cocktails, elevated bites from Princi and exclusive coffee drinks, as well as classes, workshops and tasting flights.
While Starbucks has several Reserve stores and bars currently open in New York City, this upcoming Empire State Building store will be one of the largest — rivaling the flagship Reserve Roastery location in Chelsea. It will be the only store to feature Starbucks’ new brewing method, born out of the company’s R&D team: cold-pressed espresso, which “uses cold water and gentle, upward pressure to unlock a softer, sweeter espresso shot, similar to a slow-steeped cold brew" but will not have a coffee roaster on site.
On the same day that Starbucks announced the opening of the new Reserve store, staff at the flagship Roastery went on strike to protest the corporation’s lack of response to “urgent health and safety conditions” at the store, including allegations of bedbugs and black mold. The Starbucks Roastery store unionized in April of this year after a National Labor Relations Board election. The Roastery joins the Williamsburg Starbucks Reserve location in Brooklyn, which similarly went on strike earlier this month “in response to the company’s unilateral changes to benefits and store hours without bargaining.”
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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TikTok is no longer new. In fact, Nation’s Restaurant News wrote a piece in 2019 about how restaurants needed to pay attention to the social media platform for marketing and messaging purposes. Less than three years later, TikTok has become commonplace for chains and independent restaurants. You’re behind the times if you’re not on TikTok.
We’ve seen the trends on TikTok with people commenting on the way food is prepared, with chefs like Gordon Ramsay getting in on the trend and millions of views.
We spotted two new trends on TikTok recently. Listen to me explain what they are.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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An E. coli outbreak linked to The Wendy’s Co. units in six states is over, according to the Centers for Disease Control and Prevention, but more than 40 of the 109 identified victims are being represented by lawyers.
The Dublin, Ohio-based burger chain immediately removed romaine lettuce from its menus when the outbreak was initially reported.
The incident began with three states and expanded eventually to six and spanned July 26 to Aug. 17. The outbreak involved 109 reported cases and 52 hospitalizations. The most cases were reported in Michigan, and the illnesses were identified in five other states: Indiana, Kentucky, Ohio, Pennsylvania and New York. The CDC declared the outbreak over on Oct. 4.
Foodborne illness investigators could not confirm romaine lettuce as the source of the six-state outbreak.
Let's hear more from senior editor Ron Ruggless.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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It’s hard to get a pulse on the current consumer macroenvironment and how that applies to restaurants. We all know inflation has been a relentless beast. We know low-income consumers are getting hit particularly hard.
We know consumers are sick of the higher menu prices operators have implemented to protect their margins. In fact, they’ve now identified a threshold. New data from Revenue Management Solutions finds pricing increases beyond 10-to-13% affects traffic. Food-away-from-home inflation is up 8.5% this year, so on average, restaurants fall below that threshold. That’s not to say consumers are thrilled, however. A new report from Yelp finds that consumers are increasingly searching for cheaper dining options, as searches related to quick-service and fast casual concepts are up by 10% versus the second quarter, and up by 8% year-over-year.
But the bigger picture is far more nuanced than that.
Hear more from executive editor Alicia Kelso.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
The demand for cold brew and iced coffee is surging, evidenced in part by last year’s double-digit growth of cold brew makers.
In fact, according to the National Coffee Association, one in five Americans under 40 consume a cold brew at least once a week, versus 2015, when cold coffees were “virtually unknown.” This uptick has become crystal clear at Starbucks, which now generates 75% of its sales from cold beverages. The company’s “cold category” has grown 10% throughout the past two years.
Taco Bell seems to be looking for a bigger piece of that market. The company is testing three new iced coffee flavors – Dulce de Leche, Mexican Chocolate Mocha and Sweet Vanilla – in the Fresno, California, and Philadelphia markets for a limited time. According to a company spokesperson, the Mexican-inspired offerings are priced at $2.99.
Taco Bell is constantly testing new items, so a two-market pilot may not turn a lot of heads, but there is a bigger narrative here should these beverages roll out nationally. The chain has been offering iced coffee since the launch of its breakfast daypart in 2014. Just recently, however, has it started exploring variations, including a Cinnabon Delights Coffee introduction in March. That, along with this new test, signals the nascent category is primed for a deeper marketing and innovation push.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Pizza Hut announced Tuesday the launch of Melts: a new menu category for solo diners that looks similar to a pizza quesadilla. They also resemble the very popular Papa Johns Papadias, which launched in Jan. 2020 and have been a revenue-booster for the smaller pizza brand ever since.
The Pizza Hut Melts are available for $6.99 each and come in four varieties, each with a different dipping sauce. They are made with two slices of the brand’s signature thin crust pizza with toppings and cheese sandwiched between. (Here is where the comparison to Papadias diverge, because Papadias are one folded-over slice like a pita pocket, whereas the Melts are two slices sandwiched together).
This is actually the first time the Yum Brands chain has sold slices since a failed experiment in 2014, though this time they look a little different than your traditional slices.
The brand’s CMO even said in a statement, “We like to say – pizza is for WE, Melts are for ME.”
Let’s turn to Joanna Fantozzi with more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Today, we’re talking about a collaboration between two quick-service giants.
McDonald’s and Krispy Kreme this week announced a new test that offers three Krispy Kreme doughnuts at participating McDonald’s restaurants in the Louisville, Ky., market.
Starting Oct. 26, nine McDonald’s locations will begin selling Krispy Kreme’s Original Glazed, chocolate iced with sprinkles and raspberry-filled doughnuts. They will be available all day, on-premises and at the drive-thru, while supplies last. Customers can order them individually or in packs of six. According to a joint release from the companies, the Krispy Kreme doughnuts will be delivered fresh daily to participating restaurants.
This collaboration illustrates a bigger trend that has emerged throughout the past few years with the advent of virtual concepts generating business through already-existing kitchens, as well as more co-branding opportunities that leverage brand equities and efficiencies.
Last year was a volatile one for the full-service sports bar segment, with chains in the Top 10 by systemwide sales seeing growth as high as 67% and declines as low as -11%.
In the annual Top 500 report, powered by Datassential, Nation’s Restaurant News breaks down the 500 biggest restaurant chains in the U.S. by systemwide sales, domestic units and average unit volumes. The full data also identifies chains by segment, so here we’ve broken out the 10 biggest full-service sports bar chains by U.S. systemwide sales, out of 21 that appear on the full list.
Of these 10 chains, seven grew sales year-over-year, many by double-digit percentages — not surprising considering the impact the pandemic had on full-service restaurants in 2020. Still, many chains continued to struggle in 2021, with some chains on this list slipping as much as 11%.
Eight of these 10 chains are the same as the year before, with Wild Wing Cafe and World of Beer slipping out of the Top 10. Within the Top 10, there was a small amount of shuffling, with Dave & Buster’s overtaking Hooters and Twin Peaks pulling ahead of Miller’s Ale House.
Learn more from managing editor Leigh Anne Zinsmeister.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
There are many reasons consumers give their loyalty to certain brands. From service and value to quality and cleanliness, countless factors determine whether a guest goes back to a restaurant again and again.
In the pandemic, delivery and takeout ability factored heavily into that loyalty. And according to the annual Consumer Picks report, published in conjunction with Datassential, that remains the case.
Datassential found that in 2022, 80% of its surveyed consumers ordered more or the same amount of delivery as in the previous year, while 85% ordered more or the same amount of pick-up as in the prior year. And drive-thrus remained a driving force: 84% of consumers said they ordered more or the same amount through those lanes as in the previous year.
Hear more from senior editor Ron Ruggless.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Against the backdrop of continued inflation and industry-wide staffing shortages, Domino’s Pizza delivered positive domestic Q3 results Thursday morning, including a same-store sales increase of 2%.
This is compared to a negative 2.9% in Q2. In fact, three of the past four quarters have been negative for the brand – a trend the company hasn’t experienced in a decade as it lapped anomalously positive trends throughout the first two years of the pandemic.
Domino’s breaks down its system in quintiles based on how fully staffed restaurants are. The gap between the top and bottom quintiles has been shrinking every quarter – from 17 points in Q1 to 11 points in Q2 and 8 points in Q3 – and service times are improving accordingly. CEO russel Weiner said the number of job applications and new hires in corporate stores are “more or less” at 2019 levels.
Listen to Alicia Kelso explain her take-aways from the recent earnings call.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Taco Bell is bringing back its wildly successful Nacho Fries and adding some extra heat this time around.
The item returns to menus Oct. 13 for a limited time and will feature a new option with Truff’s Hotter Hot Sauce. The two Southern California brands tested the product last year and are now bringing it systemwide while supplies last.
Truff Hot Sauce was launched in 2017 and quickly garnered a dedicated social media following and a vote of approval from Oprah, among other celebrities. The company labels its products as “luxury condiments,” describing its hot sauce “as if truffle and sriracha had a baby.” According to the company, the Truff Hotter Hot sauce is about two to three times the heat level of its original formula, or about 5,000 to 7,000 on the Scoville Scale (for context, Tabasco Sauce measures about 2,500 SHUs).
The partnership with Truff is the first time Taco Bell has collaborated with another brand on a new sauce, which is notable as the brand’s sauces are a signature differentiator. Taco Bell has even gone so far as to launch a sauce packet merchandise collection, with everything from socks and bow ties to bathrobes and blankets.
The partnership marks the latest iteration for Taco Bell’s Nacho Fries, which were initially introduced in 2018 and quickly became the chain’s most successful new product launch ever. The fries are part of one in four orders at the chain and, most recently, helped break weekly sales records twice during Q2. The success has inspired Taco Bell to introduce limited-time iterations, like the Rattlesnake Fries and Reaper Ranch Fries, to generate occasional traffic and sales upticks. The Truff’s collaboration should continue the product’s success, as consumer demand for hot sauce grows at a compound annual rate of over 7%.
Hear more from Alicia Kelso.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Fat Brands announced Tuesday the grand opening of the first cobranded Johnny Rockets location with Hurricane Wings in Washington, D.C., continuing the global franchising company’s strategy of building up its multi-brand store model that started in 2013 and accelerated earlier this year. Johnny Rockets retro burgers are being paired with Hurricane Grill & Wings’ sister brand, Hurricane Wings, inside a Holiday Inn location.
Brand synergy is the name of the game for large restaurant groups these days, many of which are leaning more into mix and match cobranding collaborations and rejecting siloed portfolios. Fat Brands CEO Andy Wiederhorn told Nation’s Restaurant News that the company currently has 225 cobranded restaurants, and those locations on average see a 20% increase in average unit volume as compared with traditional units.
Although sister brands sharing a location is nothing new, companies are taking it to the next level with new off-premises-focused, tech-forward restaurant formats. Last year, Focus Brands opened the first Auntie Anne’s drive-thru cobranded with Jamba—simultaneously expanding their presence outside malls and driving home a multi-brand development strategy.
Since then, various combinations of Auntie Anne’s, Cinnabon, and Jamba have sprung up nationally, especially in airports and on college campuses.
Learn more from Joanna Fantozzi
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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A Chick-fil-A operator in Miami recently got 429 applications for a job within a week of posting. The secret? A three-day work week.
Justin Lindsey started a three-day workweek in February 2022, leading to some skepticism among restaurant leaders.
All 18 managers had to be on board before Lindsey would start the program. He divided them into two “pods.” The pods essentially work three days of 13-14 hour shifts, then have four days off, with one seven-day stretch per month where they are off consecutively.
Hear more from host Holly Petre.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Restaurant operators are rethinking their real estate strategies in a challenging market, where top sites are in short supply and costs are rising for both new construction and leased locations.
Some operators that have long focused on building sites from the ground up have shifted instead to a strategy centered on acquiring closed locations and remodeling them to accommodate their own concepts. Others have been taking a closer look at nontraditional locations, such as travel plazas and hotels, or at other sites they might not have considered just a few years ago.
Many operators are also taking consumers’ ongoing interest in off-premises dining into account in their site selection, as they downsize their dining rooms and boost their takeout options with more drive-thru and pickup windows.
Hear more from managing editor Leigh Anne Zinsmeister.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
Burger King announced a new advertising campaign in partnership with creative agency, OKRP — “You Rule — that focuses on people and personalized experiences. The advertising campaign’s impact will be felt across multiple channels, from commercials to in-store experiences and is part of the “Reclaim the Flame” plan: a collaboration between Burger King and its franchisees to drive performance growth. The “You Rule” campaign will be rolling out on Oct. 10, and the brand describes it as an “emotional articulation,” as well as an update on the iconic “Have It Your Way” jingle that was launched in the 1970s and has stayed a relevant pop culture moment today. The commercials feature an original hip-hop-style jingle, classic Burger King color schemes and logos, and a lyric that is a nod to the “Have it Your Way” Burger King slogan. The overall vibe of the ads is nostalgic: a marketing direction that many foodservice brands have taken lately to pull in Millennial and Gen X customers who remember classic commercials from their childhoods. Hear more from Joanna Fantozzi. Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode. Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
With continued supply chain issues and inflationary pressures mounting, it’s no wonder that most restaurants raised their prices this year. According to the Bureau of Labor Statistics’ Consumer Price Index, food away from home prices increased 8% from Aug. 2021 to Aug. 2022. But where can you find the biggest price increases? According to research published by personal finance technology company, MoneyGeek, San Francisco has edged out Los Angeles and New York City to be named the most expensive city for a burger, fries and a soda, with the average meal at major chains costing $15.30 in San Francisco, $14.59 in Los Angeles, and $14.22 in New York City. And while it is true that nearly every restaurant chain raised its prices at least once over the past year, some did so more than others. For more on the subject, we talk to senior editor Joanna Fantozzi. Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
In the annual Top 500 report, powered by Datassential, Nation’s Restaurant News breaks down the 500 biggest restaurant chains in the U.S. by systemwide sales, domestic units and average unit volumes. The full data also identifies chains by segment, so we’ve broken out the 10 biggest limited-service chicken restaurants by U.S. systemwide sales, out of 38 that appear on the full list. Of these 10 chains, the seven biggest grew sales year-over-year — from a pandemic year during which limited-service and chicken both thrived, and those that declined were by less than 4%. Within the Top 10 LSR chicken chains, one is new to the list while another — El Pollo Loco — has fallen out. Of the mainstays, Raising Cane’s has leapfrogged a restaurant with its 38% growth. Hear more from managing editor Leigh Anne Zinsmeister.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN hosted by Holly Petre. Today, we’re talking about the latest restaurant technology company to go public. Labor automation company Presto became the latest restaurant technology company to go public last week, with an initial public offering of $120 million from a merger with special acquisition company, Ventoux CCM Acquisition Corp. The restaurant tech space has been hot this past year, from unicorn IPOs to a flurry of fundraising and M&A activity from smaller tech startups. It only made sense for Presto — which has made a name for itself in labor tech solutions over the past 14 years — to join the throng. Presto CEO Raj Suri started Presto 14 years ago after working as a waiter during the peak of the 2008 recession and has since tried to move the industry forward toward improving the guest experience through labor automation tools. The next step in their evolution was completing a previously announced merger with Ventoux CCM Acquisition Corp. on Sept. 21, raising $120 million, less than analysts had initially hoped, though Suri is not too worried about macroeconomic challenges that might influence the valuation of his company. Moving forward, Presto will make a lot of moves in the restaurant space through acquiring other smaller brands, and Suri hinted that Presto will have more to announce on that front in the near future. Suri wants Presto to be a leader in moving the needle forward on what restaurant tech companies are capable of, in terms of providing solutions for the industry. Hear more from Joanna Fantozzi, who spoke with Suri last week. Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
After Hurricane Ian made landfall in Florida on Wednesday as a Category 4 storm and continued to cause damage on Thursday as it was downgraded to a Category 1 storm, many residents and businessowners are now left to assess the damage. One indicator of the catastrophic impact of the hurricane is that, at the peak of the storm, 40 Waffle Houses were closed across Florida Over the years, 24-hour breakfast brand Waffle House has become a storm barometer of sorts across the Southeast: if Waffle Houses are closing you know the storm is bad. Hear more from Joanna Fantozzi. Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
P.F. Chang’s China Bistro Inc. is updating its loyalty rewards with a subscription-based loyalty program called Platinum Rewards, the company announced this week. For a monthly $6.99 subscription fee, Platinum Rewards members will: earn 1.5 times as many points (or 15 points for every $1 spent) as Gold Rewards members on P.F. Chang’s dine-in, takeout and delivery orders; pay no order minimum or delivery fees with orders placed through pfchangs.com or on the P.F. Chang’s mobile app; get priority reservations on the stores’ waitlists; and have access to Platinum Concierges for questions or comments. The company said existing P.F. Chang’s Rewards members will automatically become P.F. Chang’s Gold Rewards members. P.F. Chang’s Gold Rewards members receive 10 points for every $1 spent at P.F. Chang’s as well as a complimentary birthday dessert or appetizer. Here’s Ron Ruggless with more on the story: Be sure to subscribe to First Bite wherever you get your podcasts or on Spotify, or Apple Podcasts.
After months of tense communications, Starbucks and SBWorkers United seem to finally be ready to negotiate union contracts. This week, SBWorkers United announced that it is drawing up a list of non-economic proposals for its parent company, while Starbucks published a press release on its union voting website “urging” workers to begin bargaining at the 234 unionized Starbucks stores.
Hear the full story from Joanna Fantozzi.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Taco Bell is capitalizing on its fanbase’s nostalgia yet again with the creation of a face-off voting challenge between two defunct favorite menu items: the double decker taco and the Enchirito. Voting is open to all Taco Bell Rewards members through Oct. 6, and the winner will be announced on Oct. 7 and available as an LTO.
This comes on the heels of the brand’s reintegration of the fan favorite Mexican Pizza, after a viral marketing campaign started by singer Doja Cat, which led to a musical.
Hear the full story from Joanna Fantozzi.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we’re talking about Texas Roadhouse’s new merchandise.
Texas Roadhouse last week introduced merchandise, including Honey Cinnamon Butter candles, which are based on the casual-dining chain’s signature menu item. It’s far from the only restaurant company entering the candle space: Shake Shack and Whataburger also have candles for sale, while Dairy Queen, McDonald’s and KFC have expansive merchandise lines.
Texas Roadhouse’s merchandise, including the 13-ounce candle, has been in the works for years, according to CEO Jerry Morgan.
For more on the subject, we turn to senior editor Ron Ruggless.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode. Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts. Apple Podcasts
Chipotle Mexican Grill has agreed to pay the State of New Jersey $7.75 million for thousands of violations of child labor laws, the state announced on Tuesday.
Chipotle will require training for managers on the state’s child labor laws under the terms of the settlement. The fast-casual chain based in Newport Beach, Calif. also named a child compliance officer and said it will audit its own practices.
The settlement is a result of a 2020 audit done by the state of New Jersey into Chipotle that found more than 30,000 violations including instances of minors working past the 40-hour work week and not being given enough meal breaks.
Under New Jersey law, 14- and 15-year-olds can work up to 40 hours a week when school is out of session, with 30-minute meal breaks after five hours of work. They’re allowed to work up to 18 hours a week during school months. Sixteen and 17-year-olds can work up to 40 hours a week with 30-minute meal breaks year-round.
Hear what I have to say on the matter.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Taco Bell announced Wednesday the introduction of Beyond Carne Asada Steak in collaboration with Beyond Meat. This item will be available as an LTO in test markets in the Dayton, Ohio area starting Oct. 13 and will be featured in the Beyond Steak quesadilla (priced the same as a traditional steak quesadilla). Customers, however, can add the item as protein in any menu item and there is no additional cost to swap out proteins for the Beyond Steak.
This will be Beyond Meat’s first plant-based steak product: previously the company has only created vegan ground beef and beef crumbles. The product is made with vegan ingredients like vital wheat gluten and faba bean protein.
Taco Bell has a rich history of offering a variety of plant-based fillings and proteins, from its ever-popular cheesy fiesta potatoes, which returned after a hiatus during the pandemic, much to the delight of fans, and its multiple iterations of proprietary plant-based proteins, including the “boldly seasoned” pea and chickpea blend protein that was used as the star of the Cravetarian Taco in April 2021, and the “boldly seasoned plant-based protein” in the Crispy Melt Taco introduced last month. According to the brand, plant-based orders account for 12% of all sales.
Hear what Joanna Fantozzi has to say on this latest LTO and product debut.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we’re talking about CREATE: The Future of Foodservice, which took place this week in Denver, where hundreds of restaurant operators and members of the foodservice community gathered.
Editorial director Sam Oches takes you behind the scenes of the panels, fireside chats, awards and keynote that took place over two days. Find out his key takeaways, who he was most excited to hear from, and which brands impressed him the most.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
When Texas native Briana Valdez moved to Los Angeles, she had a hard time finding restaurants that reminded her of home, with Tex-Mex-style tacos and Southern hospitality. So, after years of working with famed chef Thomas Keller at Bouchon, and having been mentored by P.F. Chang’s founder Paul Fleming, Valdez claimed that whitespace and opened the first location of HomeState. The concept is now known for its community vibes and Texan classics like breakfast tacos, Texas toast, and Frito pie, writes Joanna Fantozzi in her feature on HomeState for nrn.com. That’s why we named HomeState one of our 2022 Hot Concepts, an award given out to companies that we think are set to take off. In years past, we’ve named concepts to this list including The Cheesecake Factory, Panda Express, Noodles & Company, Jamba Juice, True Food Kitchen, CAVA, and Bareburger over the 25-year span of the award and they’ve clearly risen to the occasion.
Here's Joanna Fantozzi with more on HomeState and what we can expect from this growing LA-based brand.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Sixty Vines, the six-restaurant FB Society concept, taps deeply into wine culture, from 60 different varieties at four graduated pour sizes to a friendly wine-country ambiance.
Founded in 2016 in Plano, Texas, Sixty Vines is designed for experience, especially in the exploration and discovery of new wines, which can be ordered in 2.5, 5 and 8 ounces of a 750 ml carafe. Availability of wines varies by location.
Sixty Vines’ keg system sidesteps bottling costs, yielding a number of glasses of wine under $10 — a rarity among casual-dining menus.
The 60 taps at the newest Boca Raton unit also lean into the outdoor patio service area, Carcara said.
Growth this year will include a new Sixty Vines in The Woodlands near Houston, and plans call for openings in Charlotte, N.C., and Reston, Va., in the first half of 2023 and another Orlando, Fla., area restaurant and Washington, D.C., in the second half of next year. FB Society
Sixty Vines does have a cocktail program, because customers often enjoy starting the meal with a cocktail and then shift to wine.
The quality wine is matched with a growing geography of wine foods, from California vegetables to Spanish olives and charcuterie.
Like the menu, the restaurant design is meant to be comfortable.
FB Society is a multi-concept operator that rebranded from Front Burner Restaurants LLC in late 2020. It previously created and spun off the Twin Peaks and Velvet Taco concepts. In addition to Sixty Vines, it operates Whiskey Cake, Mexican Sugar, Ida Claire, Haywire, The Ranch and a slider concept called Son of a Butcher. It also operates Legacy Hall, a food and entertainment venue, wrote Ron Ruggless in his Hot Concepts feature.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Tea — refreshing, rich in antioxidants, and with a variety of flavors to suit many palates — is enjoying robust growth across the country, both on its own and in cocktails and other beverages. Even the high tea service and tea parties of decades ago are enjoying a resurgence as consumers seek more robust experiences when they go out, writes senior food and beverage editor Bret Thorn in a recent feature for NRN.com.
It's not just about ritual, according to Bret, it’s also about caffeine consumption in a longer, more drawn-out way. It’s becoming an experience rather than a quick hit of energy. And it includes the benefits that tea provides that coffee doesn’t have, which Bret goes into further on the podcast.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Welcome to Tech Tracker, where senior editor Joanna Fantozzi walks you through all the twists and turns in the technology world. This month, she’s talking about how one fine-dining restaurant turned to NFTs for its latest marketing push and what that could mean for the restaurant’s future; the latest in pizza robots, including a test with pizza giant Domino’s in Germany; and the latest technology at vendors like DoorDash and Lunchbox.
Listen to today’s episode to hear the latest in restaurant technology news straight from our technology reporter.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The new FAST Recovery Act from California, which was signed into law on Labor Day by Governor Gavin Newsom, has been heralded as bad for business by the businesses themselves. The act could raise the minimum wage for fast-food workers from $15 per hour to a ceiling of $22 per hour, based on the recommendation of a bipartisan council. This could be potentially deadly for some franchisees of major quick-service and fast-casual players who operate as small businesses, according to experts we’ve spoken to.
Hear what Joanna Fantozzi has to say about this and what one expert she spoke to had to say on the matter.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Starbucks has finally entered the metaverse. After a long waiting game, the quick-service chain has made its debut in the metaverse and it’s everything customers were waiting for and more. It far surpasses its restaurant competitors in terms of user capabilities and, as Joanna Fantozzi explains, it’s the most advanced in terms of what she deems “Loyalty 2.0.” This platform allows users to play games but also exchange tokens or NFTs for rewards in real life, something that’s new to the metaverse world for chain restaurants.
Hear senior editor Joanna Fantozzi explain everything ahead.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Chipotle has disabled a viral hack for $3 burritos. After TikTok users and social media users at large discovered a hack that allowed users to purchase a taco for $3 and jazz it up to equal a burrito, the chain reacted — and swiftly. This comes in the wake of the brand partnering with a viral TikTok star, the corn kid, for a campaign. Chipotle clearly has its finger on the pulse, but will that help the brand survive in the long term?
I discuss what that means for the brand ahead.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Monterey Bay Aquarium, whose Seafood Watch list of fish and shellfish to consume or avoid based on their environmental impact is widely regarded as the industry standard, on Tuesday moved American lobster from the North Atlantic onto its “red” list of species to avoid due to concerns over fishing practices that it said could harm the endangered North Atlantic right whale and other species. Previously the crustacean had been listed as “yellow,” or a good alternative, from most fisheries. The best choices according to Seafood Watch are listed as “green.”
The southern New England fishery had already been deemed “red” due to right whale endangerment and concerns over the possible effects of large-scale lobster fishing in the area, which it said was “likely underestimated,” but the new list now recommends avoiding American lobster from all of Canada and the Northeastern United States, wrote Bret Thorn for nrn.com.
Now, hear what he has to say about the future of lobster on menus.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Automation has been on the restaurant industry’s back burner for years. While companies like Miso Robotics have long dazzled the media with burger-flipping and wing-frying robots, it wasn’t until the current labor crisis that restaurant AI evolved from a promotional experiment to a permanent solution. In recent months, the pizza industry has far and away become the preeminent leader in kitchen robotics, with pizzeria automation companies like Piestro and Picnic Works signing partnerships with emerging pizza chains in need of cost-cutting solutions, Joanna Fantozzi wrote in a recent feature for NRN.com.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Long gone are the days of brands just being sassy on social media; now it’s time for them to be savvy on social media and MrBeast Burger was a perfect example of capitalizing on a moment. When the brand debuted, it was met with national acclaim, one of the biggest virtual brand openings ever. Now it has a brick-and-mortar location in the American Dream mall in New Jersey, where thousands of fans gathered to watch MrBeast, whose real name is Jimmy Donaldson, cut the ribbon to the first permanent location of the chain that spawned thousands of virtual franchises.
So what does this all mean? Well, it means that celebrities, and the internet, are becoming more involved in the food world than ever before. Not simply with brands, but consumers are going to have to get used to their favorite stars from social media jumping into the food world like MrBeast did, and brands doing the opposite. Think about the rising tide of restaurants looking to TikTok and TikTok creators for content. Just last week, Chipotle used the corn kid on TikTok, a viral kid who loves nothing more than corn, to create a viral ad campaign for its burrito bowls and corn salsa. It did gangbusters.
There are over 1700 MrBeast Burgers as of this moment.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
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Starbucks named a new CEO after months of speculation, including our own, with predictions ranging from interim CEO Howard Schultz taking the helm permanently to Schultz remaining CEO for several more months than expected. But, right on time — or even ahead of schedule, according to some analysts — Schultz named a new permanent CEO in Laxman Narasimhan, a former PepsiCo executive. More recently, he had been serving as the CEO of a consumer nutrition company called Reckitt. Schultz will remain on at Starbucks to help Narasimhan until he takes on the role by himself on April 1, 2023. What does this new appointment mean?
We have senior editor Joanna Fantozzi to break down everything.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
When Texas native Briana Valdez moved to Los Angeles, she had a hard time finding restaurants that reminded her of home, with Tex-Mex-style tacos and Southern hospitality. So, after years of working with famed chef Thomas Keller at Bouchon, and having been mentored by P.F. Chang’s founder Paul Fleming, Valdez claimed that whitespace and opened the first location of HomeState. The concept is now known for its community vibes and Texan classics like breakfast tacos, Texas toast, and Frito pie, writes Joanna Fantozzi in her feature on HomeState for nrn.com.
That’s why we named HomeState one of our 2022 Hot Concepts, an award given out to companies that we think are set to take off. In years past, we’ve named concepts to this list including The Cheesecake Factory, Panda Express, Noodles & Company, Jamba Juice, True Food Kitchen, CAVA, and Bareburger over the 25-year span of the award and they’ve clearly risen to the occasion.
Here's Joanna Fantozzi with more on HomeState and what we can expect from this growing LA-based brand.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The saga of Starbucks continues and we’re here to report on it. Unions continue to battle against corporate, Schultz remains the top dog and continues to make decisions impacting the entire company as interim CEO, the loss of the COO position, and the possibility of the chain being a third place has become a question mark.
Although the abundance of operational changes coming from the world’s largest coffee chain may seem reactive and chaotic, analysts that have covered Starbucks for a long time are experiencing déjà vu.
For a longer analysis, we had Joanna Fantozzi, who wrote a deep dive here, come on the show to give us the low down on what’s been happening with Starbucks and what Schultz is doing over there.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The California Senate and state Assembly passed Assembly Bill 257 on Monday — also known as the Fast Food Accountability and Standards Act or the FAST Recovery Act — which would create a state-run fast-food council that would set standard wages, working hours and conditions for employees of quick-service chains with 100 or more locations nationally.
The bill is now at Governor Gavin Newsom’s desk for signing. Newsom has not indicated if he would pass the bill, and it was initially criticized for having “significant ongoing costs” by the state Department of Finance.
The FAST Recovery Act has been met with pushback from the business community, which has criticized the bill for creating untenable standards for the restaurant industry, including the possibility of a $22 statewide minimum wage, which could raise menu prices by 20%, critics of the bill told the Los Angeles Times.
Although the council would specifically target larger chains, the International Franchise Association argues that many franchisees of these chains are smaller businesses and it would be just as challenging for them to keep up with these new standards, as it would be for an independent restaurant operator.
Learn more from senior editor Joanna Fantozzi.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Hardee’s is teaming up with Southern Grist Brewing Company to launch a beer inspired by, and containing the quick-service chain’s biscuits. Strawberry Biscuit Ale was made by adding 200 pounds of Hardee’s Made from Scratch Biscuits, plus some strawberry purée, to wort — the combination of water, malt, yeast, hops and sometimes other flavorings that is fermented into beer — to make 465 gallons of the brew. The launch is timed to coincide with National Biscuit Month, which is September. Other beers currently on offer by Southern Grist include one made with Snickers candy bars, beers with pie-inspired ingredients, and a milk stout made with coconut.
Senior food and beverage editor Bret Thorn has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Workers at a Lansing, Mich. Chipotle have officially formed the company’s first union.
The workers voted overwhelmingly last Thursday to form a union with the International Brotherhood of Teamsters, making it the first of the restaurant chain's 3,000 locations to organize. The unit in Augusta, Maine, where workers attempted to unionize was closed by Chipotle last month.
According to a release, workers are forming the union to improve their work schedules, increase wages, and gain the respect from management that they feel they've rightfully earned. The corporate-owned restaurant did not object to the filing.
The workers join the growing movement of unionization in the country, led by Starbucks with over 200 unionized stores across the U.S. Amazon and Apple have also seen unionization efforts by workers.
Chipotle has four locations in and around Lansing. Local 243, with union halls in Lansing and Plymouth Township, represents more than 4,000 workers across Michigan.
Senior editor Joanna Fantozzi has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Welcome to First Bite, a Nation’s Restaurant News podcast, your daily source of news from NRN.
Today, we’re talking about unmasking virtual restaurants and transparency.
Virtual restaurants boomed during the pandemic. When brick and mortar became impossible to operate, businesses went online and a whole new batch of virtual restaurants popped up – some even part of other restaurants.
Many of these restaurants had unknown origins while others were clearly related to parent companies as senior editor Joanna Fantozzi will explain ahead.
She recently wrote about the virtual brand conundrum and how restaurants should react to the changing landscape based on a very personal experience she had.
Listen to her tell her story on this episode.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Casual dining struggled during the pandemic mainly because it had been such an on-premises business before 2020, and the pandemic wiped that all out. That's when off-premises became the crux of everyone business and QSR became king, along with those that had drive-thrus. Soon, everyone was switching to off-premises, even opening casual-dining drive-thrus like that at Smokey Bones.
One chain that focused on off-premises business was Texas Roadhouse and, as senior editor Ron Ruggless walks us through, they worked hard to gain their footing.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Today we’re going to be talking about Joanna Fantozzi’s column, Tech Tracker. Tech Tracker rounds up what's happening in the technology sector of the restaurant industry, including news from restaurants vendors, digital platforms and third-party delivery companies.
This month, the main story comes from an interview with Kitchen United CEO Michael Montagano, who gave some insight into the ghost-kitchen company’s recent $100 million fundraising round with investments from a wide range of companies. Those companies include Burger King parent Restaurant Brands International, supermarket company The Kroger Co., Simon Shopping Malls and convenience-store chain Couche-Tard Circle K. Joanna has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
When customers choose to actually dine in a restaurant, rather than order take-out or delivery, they’re often looking to be dazzled a bit, charmed by great service or wowed by a dramatic presentation. Increasingly, the people in charge of running beverage programs are meeting those needs by serving cocktails that are more than mere drinks. There’s a bona fide trend of beverages with edible components. These go beyond the olives in a martini, or the occasional over-the-top grilled cheese sandwich on a brunchtime bloody Mary. Nowadays these side dishes come paired specifically with the cocktails that were ordered.
Senior food and beverage editor Bret Thorn has the story on why these cocktails are becoming trendy and how it’s impacting business.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
There’s a new plant-based player in the game: Burger King. Burger King has added a new chicken sandwich to its lineup, this time made of an Impossible patty. Adding to the chain’s line of Impossible products that already includes the Impossible Whopper and nuggets, this new chicken sandwich also joins the chicken sandwich wars that chains have been waging since the release of the Popeyes chicken sandwich. But now we also have the plant-based wars, with dozens of chains competing to be the first national plant-based chain. Will the big QSR players overtake the market with their own plant-based offerings?
Senior editor Ron Ruggless has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Starbucks is seemingly always in the news. It appears we can’t go a week without covering them twice. First, there was the accusation of election rigging by Starbucks against the National Labor Relations Board.
Then, on Thursday, two pieces of news broke. Starbucks lost a court case against what has been called the “Memphis 7,” seven former Memphis union leaders who were fired several months ago. The chain must reinstate them by Monday, according to the ruling.
Later Thursday, it was announced that Starbucks’ chief operating officer would be leaving and the company would be eliminating the role entirely after the exec left the role. It’s an odd move for such a large chain, especially one currently on the hunt for a new CEO.
Senior editor Joanna Fantozzi breaks it all down here, starting with the union battle and the “Memphis 7.”
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Next-gen restaurant designs aren’t new. They’ve been around for years, but in a pandemic-fueled world, they’ve been popping up more and more. Think about the Taco Bell Defy drive-thru that shocked the world with its innovation.
Now Wendy’s is getting in on the game with its latest innovative design released on Wednesday.
The new prototype is designed for digital-savvy customers, according to the company, and will have a host of new features including a galley kitchen, mobile parking and shelving, and updated technology.
Here’s managing editor Leigh Anne Zinsmeister with more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Starbucks recently accused the National Labor Relations Board of rigging union elections. According to an Aug. 15 letter sent to the NLRB by Starbucks general counsel Zabrina Jenkins and Kimberly Doud, the NLRB St. Louis region has “engaged in highly improper, systemic misconduct” involving secret coordination of in-person voting at NLRB offices for a supposedly mail-in ballot election, giving union representatives confidential election real-time information, disenfranchising voters who did not cast in-person votes, and mishandling ballots. To break all this down, we have senior editor Joanna Fantozzi with us.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Actor and comedian Kevin Hart has entered the plant-based restaurant war with his newest project: Hart House. The plant-based restaurant in Los Angeles is getting a dose of celebrity from Hart and the backing of legit restaurant folks including the former president of &pizza Andy Hooper and former Burger King chef Mike Salem. Salem famously developed the Impossible Whopper, one of the first plant-based QSR menu items. The hook of Hart House is that its proprietary meats are priced at a reasonable point so it’s affordable to everyone. Here's editorial director Sam Oches with more on Hart House and its new CEO — Hooper.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The annual Top 500 report brought to you by Nation’s Restaurant News and Datassential’s Firefly is a comprehensive report of the top restaurant companies ranked by data such as U.S. systemwide sales and unit count. It provides AUV, or average unit volume. Last week, managing editor Leigh Anne Zinsmeister took a deep dive into that data and she’s on the show today with a few select nuggets. For the full list, head to nrn.com/2022top500.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The last time First Bite did an earnings report was two weeks ago and we covered the financial ins and outs of brands ranging from Chipotle to Starbucks with Nation’s Restaurant News managing editor Leigh Anne Zinsmeister.
Since the last time we caught up with Leigh Anne for earnings, 24 restaurant chains have reported.
That includes brands like Taco Bell, KFC, First Watch, Firehouse Subs, Burger King, Popeye’s, Sweetgreen, and more.
That’s a lot to talk about but First Bite has you covered. Here Leigh Anne is with an overview of what happened these past two weeks.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Wendy’s reported its second-quarter earnings on Wednesday morning and the big news to come out of it was the chain’s downsizing of its partnership with Reef Technology, the embattled third-party ghost kitchen provider.
Mainly, the chain found that Reef’s new strategy, which changed in light of some labor practices, wasn’t working for the quick-service brand.
Despite that news, same-store sales were still up 3.7% at Wendy’s, with an increase of 2.3% domestically and 15.2% internationally.
NRN senior editor Ron Ruggless has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Meet delivery’s newest player: Gopuff. The Philadelphia-based brand is doing it all. From cooking to delivering, Gopuff has its hands in every part of the food and consumer packaged goods aspect of the delivery business. It’s a unique business proposition NRN senior editor Joanna Fantozzi, tells First Bite host Holly Petre, because the company acts like a virtual brand and like Amazon.
Gopuff just signed its first restaurant deal, with BurgerFi. That partnership is going national, and Gopuff will soon deliver BurgerFi’s burgers and fries to customers in a dozen cities in the Gopuff network, including Miami, New York City, Nashville and Philadelphia. BurgerFi will also be available through more than 30 Gopuff Fresh Food Hall locations (Gopuff’s virtual food hall) around the country, even in locations where there are no brick-and-mortar BurgerFi stores.
Learn more about Gopuff from Joanna here.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
On Tuesday morning, private equity firm and Modern Market Eatery’s parent company, Butterfly Equity, announced the intent to acquire fast-casual chain Qdoba Mexican Eats for an unspecified amount of money. The transaction, which is expected to close in the third quarter of 2022, will merge Modern Restaurant Concepts — which encompasses Modern Market Eatery and Lemonade — and Qdoba into one fast-casual restaurant platform, though all three will continue to operate separate brands.
Then, just a few hours later, MTY Food Group, parent to Papa Murphy’s, acquired Famous Dave’s parent BBQ Holdings. The deal was priced at $17.25 a share, or about $200 million. BBQ Holdings, also parent to Village Inn, Barrio Queen, Granite City and other restaurants, operates over 200 franchised locations and 100 corporate-owned stores. BBQ Holdings acquired Barrio Queen earlier this year.
This comes two weeks after the purchase of Bellagreen by Au Bon Pain’s parent Ampex Brands, which was allegedly a long time in the works.
What does all this mean with a looming recession ahead? NRN’s editorial director Sam Oches weighs in.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Shake Shack is betting big on its drive-thrus. With a 10.1% rise in same-store sales falling below analysts’ low- to mid-teens predictions, the chain is struggling to find its footing as the segment leader it once was.
One thing it hopes will bring it back is drive-thru units situated in suburban areas, a relatively new market for Shake Shack.
The six already-opened drive-thrus have outperformed current average weekly sales per restaurant by about $6,000.
The chain also announced a price raise in the mid-fourth quarter of 5-7%, the second price hike this year following one in March. CEO Randy Garutti still believes Shake Shack has the competitive edge among its better-burger competitors, however, even with the price hikes.
NRN senior food and beverage editor Bret Thorn has more on the earnings.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The momentum Papa Johns has seen throughout the pandemic is waning, according to the company’s latest earnings. The pizza restaurant chain saw 0.9% same-store sales growth in North America but an 8% drop internationally, due in large part to a challenging quarter in the U.K.
The biggest news was that Papa Johns took a 7-8% price increase in 2022 amid inflationary concerns while not rolling out value deals systemwide.
But the chain is confident that through growth and category ubiquity, sales will rise again even amid a recession.
Here’s NRN senior editor Joanna Fantozzi with an in-depth analysis of the earnings call.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Last month, the National Restaurant Association sent a letter to the Small Business Administration, asking it to redistribute $180 million in funds no one knew were still left from the Restaurant Revitalization Fund (RRF). This is the latest news in the saga that has become the RRF. For today’s episode of First Bite, we’re taking a look back at the RRF and where it stands now amid this recent news, including new updates since we last shared the this with you.
Here’s NRN senior editor Joanna Fantozzi with more.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Starbucks announced its latest quarter earnings on Tuesday, and they did well — really well. Starbucks’ quarterly revenues rose to a record-breaking $8.2 billion with the North America segment along rising 13% to $6.1 billion. Same-store sales were up just 3% globally but 9% domestically. The goal of Starbucks’ quarter was improving employee morale as over 200 stores have now unionized.
Hear NRN senior editor Joanna Fantozzi explain more.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Doja Cat made up a rap verse on TikTok that went viral asking Taco Bell to bring back the Mexican Pizza, which was pulled from menus in the great menu purge of 2020. They brought back Mexican Pizza and later called Doja Cat the “voice of the Taco Bell people.”
That was in May.
Two weeks later, Taco Bell was out of Mexican Pizza, blaming it on supply chain disruptions.
While the item was supposed to be an LTO, the offer was supposed to last six months, not two weeks. Fans were outraged. The Taco Bell musical, with music and lyrics by Dolly Parton and the team behind Bridgerton the Musical, never happened because of the shortage.
But on Monday, Taco Bell announced that the Mexican pizza would be back permanently starting September 15.
Here’s NRN senior editor Joanna Fantozzi with more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Over the last couple weeks, several chains reported their second quarter earnings including Noodles and Company, Wingstop, Chipotle, McDonald’s, BJ’s, Domino’s, Texas Roadhouse and Cheesecake Factory.
The major theme was value as many companies continue to raise menu prices amid inflationary pressures.
Hear an analysis of the week of earnings from NRN’s managing editor Leigh Anne Zinsmeister here.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
Wingstop announced its second quarter results this week, and the results were surprising. The wing restaurant, which saw record sales during the pandemic, was down 3.3% for the latest quarter. To offset those sales numbers, the chain is introducing a new chicken sandwich, entering the dreaded chicken sandwich wars (if a few years too late).
Nation’s Restaurant News senior editor Ron Ruggless has more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
The U.S. Small Business Administration has yet to disperse $180 million of unobligated funds that were set aside for the Restaurant Revitalization Fund as of June 2022, according to a July report published by the U.S. Government Accountability Office. The Government Accountability Office analyzed weakness and issues with the Restaurant Revitalization Fund program, which appropriated $28.6 billion to the foodservice industry in 2021. According to the report, 88% of applicants were eligible for funding, but only 40% ended up receiving Restaurant Revitalization Fund money.
Here’s Joanna Fantozzi with more on the story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.
This week, the Starbucks union SBWorkers United passed a new milestone: 200 stores are now unionized. That was on July 22. On July 26, Starbucks reached its 201st store to be unionized in Long Island, NY — just under 8 months since the first store unionized in Buffalo, NY, in December of last year.
But it hasn’t been celebrations for the union leaders. Ahead of the union elections in a Scottsboro, Ala., store, two union leaders were fired, leading to questions of union-busting from SBWorkers United.
But that’s not the end. There have been over 250 labor violation complaints against Starbucks brought up by SB Workers United and the National Labor Relations Board and two against SBWorkers United by Starbucks.
This week, a small independent restaurant in Los Angeles voted to unionize. What does the larger unionization movement look like?
NRN senior editor Joanna Fantozzi has more on this story.
Plus, catch up on all the top news of the day with our daily news recap at the beginning of each episode.
Be sure to subscribe to First Bite wherever you get your podcasts or on Castos, Spotify, or Apple Podcasts.