October 23th QSR Roundup: Rethinking Fast Food and Restaurant Trends Amidst Closures and Collaborations
QSR news for Oct 23th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 67 articles to bring you the latest. Estimated reading time saved (at 200wpm): 114 minutes. It'll take you only 14 minutes to catch up.
Restaurant Closures and Restructuring
Denny's Plans Major Restaurant Closures
Denny's is set to close about 150 underperforming restaurants, roughly 10% of its total locations, as part of a comeback strategy to boost profitability. Half of these closures will occur by the end of 2024, with the remaining by 2025.
- The decision aims to enhance the brand's overall health and support stronger-performing outlets.
- CEO Kelli Valade emphasized that this move is pivotal for strengthening the company's system, especially after experiencing a 0.1% drop in same-store sales in Q3.
- New franchises are generating $2.3 million in average unit volumes (AUV), while closures hover around $1.1 million.
- Denny's is initiating a 2.0 Diner remodel program, where remodeled stores see a 6.4% sales growth.
Source: Nation's Restaurant News, Restaurant Business, FSR Magazine, Restaurant Dive
Shari's Restaurant Shuts Down All Oregon Locations
Shari's Restaurant has permanently closed all 42 locations in Oregon due to severe financial troubles, including unpaid taxes and rent.
- The chain once had nearly 100 locations but struggled with supply issues and operational challenges post-COVID.
- With $100,000 in unpaid fees, eviction notices, and $220,000 in tax liens, the company faced insurmountable financial woes.
- The closure impacts late-night dining options in smaller communities, leaving a gap for patrons seeking 24-hour services.
Source: Nation's Restaurant News, Restaurant Dive, Eater Portland
Red Lobster's Leadership Overhaul Post-Bankruptcy
Red Lobster has appointed Bob Baker as its new CFO to strengthen leadership following bankruptcy and a challenging period with declining sales.
- Baker brings over 30 years of experience in the restaurant industry, including CFO positions at Checkers & Rally’s, Benihana, and Cafe Rio Mexican Grill.
- Under CEO Damola Adamolekun, the company aims to revitalize and focus on enhancing the executive team.
- Red Lobster operates 544 restaurants, making it the largest seafood chain in the U.S.
Source: Nation's Restaurant News, Restaurant Business, FSR Magazine, Restaurant Dive
Potbelly Faces Activist Investor Pressure
Immersion Investments, a top 20 shareholder of Potbelly, is urging the company's board to maximize shareholder value.
- Immersion owns 299,906 shares and claims Potbelly is undervalued despite growth improvements.
- Shares have traded between $6.28 and $14.36 over the past year, with a market cap of $253.64 million, significantly lower than rivals.
- The investor suggests exploring strategic options, including a potential sale, share repurchases, or internal investments to boost efficiency.
- Potbelly's past struggles led to transformative changes under CEO Bob Wright, yet stock performance remains stagnant.
Source: Nation's Restaurant News
Food Safety Concerns and Legal Challenges
McDonald's Under Fire Amid E. coli Outbreak
McDonald's is facing a CDC investigation due to an E. coli outbreak linked to their Quarter Pounders, affecting 10 states and resulting in one death in Colorado.
- The outbreak has caused public outrage, leading to a 10% drop in McDonald's stock price.
- McDonald's has temporarily removed the Quarter Pounder from menus in affected states as a precaution.
- The CDC reported 49 infections, primarily in Colorado (26 cases) and Nebraska (9 cases), with hospitalizations and one individual developing hemolytic uremic syndrome.
- Investigations point towards contaminated slivered onions sourced from a single supplier.
- Senators Warren, Casey, and Wyden are scrutinizing McDonald's pricing strategies, highlighting a 79% profit increase from 2020 to 2023 while low-income families struggle with rising costs.
Source: Nation's Restaurant News, QSR Magazine, Restaurant Business, Salon, /r/fastfood
E. coli Outbreak Details and Impacts
- The outbreak has led to 49 reported illnesses, with ages ranging from 13 to 88.
- McDonald's is removing slivered onions and Quarter Pounders in affected states, including Colorado, Nebraska, Iowa, Kansas, Missouri, Montana, Oregon, Utah, Wisconsin, and Wyoming.
- McDonald's emphasizes that other menu items remain safe, and they are working closely with health authorities to resolve the issue.
- The incident mirrors past food safety crises, like the 2015 Chipotle outbreak that impacted sales for years.
Source: QSR Web, Salon, /r/fastfood
Starbucks’ Strategy Shake-Up
Starbucks Overhauls Strategy After Disappointing Q4
CEO Brian Niccol outlines a recovery plan focusing on five key areas after Starbucks reported a 7% drop in global same-store sales and a 3% decline in net revenue in Q4.
- Emphasizing coffee quality and the skills of baristas over new product offerings, aiming for a simpler menu.
- Addressing staffing issues and simplifying operations to improve customer experiences during peak hours.
- Reviving the brand's community coffeehouse image to welcome customers back.
- Shifting marketing focus away from Starbucks Rewards to a comprehensive brand overhaul.
- Starbucks has suspended guidance for FY 2025 due to turbulence, with global same-store sales falling by 2% for the fiscal year.
Source: Nation's Restaurant News, QSR Magazine, Restaurant Business
Starbucks' 'Wicked' Collaboration
Starbucks is collaborating with Universal Pictures to launch themed drinks and merchandise for the film "Wicked," a prequel to "The Wizard of Oz."
- Starting Tuesday, customers can try two new drinks: Elphaba’s Cold Brew and Glinda’s Pink Potion.
- On November 7, Starbucks will introduce tumblers and mugs featuring designs based on the film's characters and locations like Munchkinland and the Emerald City.
- New gift cards inspired by Emerald City will also be available, including a unique gold-colored card that functions as a keychain.
Source: Nation's Restaurant News
Emerging Menu Trends and Innovations
The Rise of Burrata on Menus
Burrata cheese, a creamy variant of mozzarella, is becoming increasingly popular in restaurants for its luxurious texture.
- Featured in 8.6% of U.S. restaurant menus, marking a 30% increase over the last four years.
- Commonly used in salads, pizzas, and pastas, often paired with seasonal produce and artisanal bread.
- Vegetarian and Asian consumers show the most awareness and appreciation for Burrata.
- The trend is driven by consumer preferences for premium dairy products and Mediterranean flavors.
- Restaurants are leveraging Burrata to tap into both casual and upscale markets, enhancing dining experiences.
Source: Nation's Restaurant News
The Waffle Renaissance
Waffles are breaking free from traditional breakfast menus, gaining traction as versatile items across various dayparts.
- Representing 80% of entrées on menus, waffles can be transformed into sweet or savory dishes like waffle sliders, brunch boards, and dessert sundaes.
- Usage of waffles in appetizers increased by 15.4% in recent menus.
- 40% of consumers prefer waffles over other breakfast foods, highlighting their comforting nature and adaptability.
- Seasonal flavors like Pumpkin Spice and Red Velvet align with consumer cravings during colder months.
- Involving staff in menu creation leads to unique local flavors and innovations.
Source: Modern Restaurant Management
Industry Collaborations and Promotions
Little Caesars Partners with Call of Duty
Little Caesars is partnering with Call of Duty again, offering dual 2XP and in-game rewards with purchases over $3 until November 10.
- Players have the chance to win gaming prizes through a sweepstakes.
- For the first time, Little Caesars features a storefront in the game, enhancing the gaming experience.
- The promotion introduces their new Crazy Puffs, which are portable and flavorful.
Source: QSR Web
Chick-fil-A Launches Family-Friendly Streaming Service
Chick-fil-A is set to launch a free app and streaming service called Chick-fil-A Play on November 18.
- The platform is designed as a family-friendly digital playground offering original animated shows, podcasts, games, e-books, and interactive content.
- Aims to provide a shared digital space for parents and kids to connect through engaging content.
- A trailer for the animated series 'Legends of Evergreen Hills' has been released in anticipation of the launch.
Source: Salon
Leadership Changes and Company Growth
KFC Canada Appoints New Leadership
Ryan Koon has been appointed as the president and general manager of KFC Canada.
- Koon brings extensive experience from KFC U.S., where he excelled in restaurant development.
- Under his leadership, KFC South Pacific saw record-breaking growth in new openings.
- KFC Canada aims to upgrade its 642 existing locations and expand in urban areas, targeting 100 new locations in Quebec.
- His strategic and collaborative leadership is expected to inspire success and innovation.
Source: QSRNext, QSRWeb
Mo' Bettahs Hawaiian Style Food's Ownership Change
Mo' Bettahs Hawaiian Style Food has sold a majority stake to Blue Marlin Partners and Trive Capital.
- Founders Kimo and Kalani Mack retain significant minority stakes.
- Since partnering with Savory Fund in 2017, Mo' Bettahs has doubled its locations and achieved a 178% revenue growth over the last three years.
- The brand has attracted nearly 500,000 loyalty members.
- The acquisition is expected to fuel further growth and expansion.
Source: Nation's Restaurant News, QSR Web
Supply Chain and Distribution Insights
Grocery Store Distribution Dynamics
Distribution is crucial in the U.S. food supply chain, with grocery stores relying heavily on food distributors.
- Large chains like Walmart and Target develop personal distribution networks, enabling direct partnerships with manufacturers.
- Smaller grocery stores depend on local distribution companies due to limited capital.
- Key grocery distributors include Sysco, McLane Company, KeHE Distributors, and US Foods.
- Selecting a distributor involves considering pricing, terms, product freshness, reliability, and technological integration.
- Challenges in the supply chain include high transportation costs and food waste management for perishable items.
Source: BlueCart
Chicago's Culinary Scene and Specialty Suppliers
Chicago’s vibrant culinary scene thrives on iconic dishes and specialty suppliers. The city is famous for:
- Deep Dish Pizza: Thick, buttery crust with toppings stacked upside down.
- Chicago Hot Dogs: Served on a poppyseed bun with mustard, relish, and peppers.
- Garrett Popcorn: Gourmet treat with flavors like caramel and cheddar cheese.
- Italian Beef Sandwiches: Thinly sliced beef with sweet peppers.
Essential suppliers include:
- Four Star Foods: Quality meat and seafood.
- Foodco Wholesale: Wide range of products, from spices to energy drinks.
- Krinos Foods Chicago: European seasonings.
- Pure’s Food Specialties: Premium snacks.
- Artisan Specialty Foods: High-end ingredients.
- Chicago Food Corporation: Asian ingredients.
- Dearborn Wholesale Grocers: Convenient for quick purchases.
Source: BlueCart
Industry Discussions and Trends
POS Monthly Fees and Alternatives
Restaurant owners discuss high POS (Point of Sale) monthly fees, revealing varied experiences.
- A user mentions paying $483 monthly for LAVU for two terminals, questioning its value.
- Alternatives shared include:
- Square: $70/month.
- Clover: $49.95/month.
- Toast: $420-$480/month with integration benefits.
- Many express frustration with LAVU's cost and customer service.
- The consensus is that fees above $300 are excessive unless justified by comprehensive features and support.
Source: /r/restaurantowners
Boosting Online Orders for Restaurants
A sushi restaurant owner in NYC seeks advice on increasing online orders through their website.
- Spending on Google Ads targeting brand name isn't effective.
- Suggestions include:
- Optimizing Google Business profile.
- Focusing on local SEO strategies with relevant keywords.
- Creating engaging content on social media platforms like TikTok and Instagram.
- Offering bundled takeout options to attract customers.
- Exploring traditional mail promotions for uniqueness.
- Caution against discounted online orders that could hurt profit margins.
- Key advice emphasizes optimizing Google Ads beyond brand names and leveraging local SEO.
Source: /r/restaurantowners
Consumer Trends and Specialty Products
Pumpkin Spice Blend Perfection
- Diaspora Co.’s Pumpkin Spice blend is highly anticipated due to ethical sourcing and fresh harvesting from 21 farms in India and Sri Lanka.
- The blend includes transparent ingredients: wild cinnamon, Makhir ginger, mace, nutmeg, cardamom, allspice, cloves, and white pepper.
- Cost-effective at $13 per container, equating to about $1 per drink.
- Versatility allows it to enhance various dishes beyond coffee, from baked goods to savory meals.
- Cited as the best tasting pumpkin spice on the market.
Source: Eater
Gummy Candy Craze
Gummy candies are booming, with sales reaching nearly $500 million and projected to grow to $750 million by 2032.
- Loved for their sweetness and chewiness, making them irresistible.
- An aficionado shares a personal quest to find the best and weirdest gummy candies.
- Favorites include Haribo's iconic gummy bears and Swedish foamy sour gummies.
- The article invites readers to share their own rankings of the best gummy candies.
Source: Eater
Legal and Ethical Issues in Food Industry
Denver Slaughterhouse Dilemma
- Denver voters will decide on Initiated Ordinance 309, which bans commercial slaughter and threatens 160 jobs at Superior Farms, the city’s last slaughterhouse.
- Mercedes Ortiz Gutierrez, a former employee, suffered severe work-related injuries and argues the compensation was insufficient.
- The initiative sparks debate over animal welfare versus workers' livelihoods.
- The closure could complicate the sheep supply chain, raise prices, and shift processing to rural areas with lower oversight.
- Community advocates propose a mixed-use redevelopment of the site.
Source: Civil Eats
Whey Waste Solutions
- 7.6 million tons of food is wasted annually in Australia; half occurs before reaching consumers.
- Cheese production generates 350 million liters of whey waste each year.
- Whey is nutrient-rich; used for products like fermented drinks and protein powders.
- Cheesemakers face barriers like high costs and time constraints in utilizing whey.
- Four solutions proposed:
- In-house products can be profitable but require investment.
- Partnerships with other companies can mitigate challenges.
- Joint ventures among cheesemakers can preserve whey value.
- Scaling up operations to accept whey from others offers growth.
- Encouraging consumer interest and regulatory support is key to change.
- Collaboration is vital to utilize this abundant resource effectively.
Source: Salon
Cultural and Entertainment News
Feud Between Martha Stewart and Ina Garten
- Martha Stewart candidly discusses her falling out with Ina Garten, revealing tensions stemming from her incarceration.
- Stewart accuses Garten of stopping communication after her prison sentence.
- The friendship appears strained over differing accounts of their relationship's end.
- Stewart's long-time publicist claims there’s no feud, but the contrasting narratives suggest otherwise.
Source: Salon
Eating Through Lisbon and the Algarve Coast
A travel writer shares their gastronomic journey in Lisbon and the Algarve Coast, highlighting local cuisine and travel tips.
- Key recommendations include delightful rabbit croquettes and chicken caramel.
- Standout accommodations: 1908 Hotel and Bairro Alto Hotel for unique stays.
- Hidden gems like Boubou's and Ofício for dining.
- Visitors should not miss a Private Food Tour and scenic car tours.
- The Algarve shines with family-friendly Martinhal Sagres Algarve and yacht experiences at Vila Vita Parc.
Source: Salon
Girl Scouts Membership Fee Increase
- The Girl Scouts of the USA hike membership prices significantly over the next three years.
- Starting from $25 to $45 in 2026, eventually reaching $65 in 2027.
- The increase will finance better support for councils and volunteers, enhancing programs and technology access.
- Financial aid will remain available for those in need.
Source: Salon
Community and Management Insights
Challenges with New Hires
A new manager struggles with training two new hires who are not improving despite having SOPs.
- Issues include misuse of cleaning products, excessive breaks, and lateness.
- Commenters suggest hands-on training and setting clear expectations.
- Emphasis on the manager's role in teaching effectively and holding employees accountable.
- Consensus around giving new employees a chance but addressing shortcomings promptly.
Source: /r/Restaurant_Managers
Declining Fast Food Service Quality
There is growing dissatisfaction with fast food service, echoing the sentiment that service quality is declining.
- Reports of long wait times and missing items, suggesting understaffing and low wages as contributing factors.
- Fast food is getting more expensive while quality has deteriorated.
- Some argue that improvements in mobile ordering have set higher expectations.
- Predictions of an eventual reliance on automation, with discussions about vending machine-style service.
- Mixed experiences, with some areas seeing improvements due to higher pay.
Source: /r/fastfood
Bar Industry Discussions
Bar Insurance Premium Hikes
A bar owner in Portland, Oregon reports receiving a $21,000 insurance quote for the upcoming year, up from $13,000, with no claims made.
- Recommendations include increasing food sales to over 25% to significantly reduce premiums.
- Several commenters noted that insurance costs are increasing everywhere.
- Negotiating terms with brokers and excluding features like live music can lower costs.
- Strategies like separating business assets into different LLCs for liability purposes are mentioned.
Source: /r/BarOwners
Google Reviews vs. Yelp Among Bar Owners
A discussion on whether Google Reviews have surpassed Yelp in significance among bar owners.
- Many agree that Yelp is outdated, with limited impact on their businesses.
- Consensus that Google Reviews are more relevant, especially among younger audiences.
- Some acknowledge Yelp's continued relevance in specific areas, particularly due to integration with Apple Maps.
- Frustrations with Yelp's marketing tactics and ethical concerns over fake reviews.
Source: /r/BarOwners
Durable Darts Solutions for Bars
Bar owners seek advice on finding durable darts that don’t need to be replaced weekly.
- Bulk purchases of plastic house darts in different colors are recommended.
- Reports indicate they last well even with heavy use across multiple dartboards.
- Using cheap darts minimizes loss, as better quality darts are more likely to be stolen.
- Vendor support can provide regular replacements and maintain customer enjoyment.
Source: /r/BarOwners
Additional Highlights
Optimizing Restaurant Efficiency
- Fine dining patrons value their treatment; optimizing table turnover without compromising service is key.
- Reducing table idle time can lead to up to 6 additional sits during peak time.
- Efficient reservation systems can maximize occupancy and revenue.
- Prioritizing front-of-house efficiencies leads to potential revenue gains.
Source: Foodservice Equipment & Supplies
Emerging Brands and Industry Recognition
- Fast Casual is accepting nominations for its seventh annual '20 Brands To Watch'.
- Eligible brands must be founded in the last five years with at least one physical presence.
- The initiative recognizes emerging leaders in the hospitality sector.
Source: Fast Casual
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