Good news for family travelers: You won’t have to drive three hours this summer to take in attractions like Paul Bunyan’s Giant Ball of Tinfoil. This vacation season those educational opportunities will be no more distant than the nearest restaurant, where June, Skipper and Princess can witness the World’s Greatest Vise in action.
But first, a primer is in order. During the Great Recession, discounting was one of the few ways restaurants could brake the loss of customers. And, man, did they use it. According to Burger King franchisees, they were actually losing money on some of the bargain-priced items they were forced to sell by corporate. McDonald’s ‘zees similarly griped about the dollar price tag they were pressed to put on some breakfast options.
Rock-bottom deals weren’t merely a quick-service phenomenon. Steak chains survived the downturn largely by giving customers low-ticket alternatives, like bar menus and drink specials. Casual chains bundled their selections, packaging two entrees and a shared appetizer at what an entree alone might’ve once cost.
Deal-making, once merely a tactic, became a fundamental strategy. Customers came to expect the deals. Some might say they became addicted. But, hey, the approach worked.
The industry might’ve had time to ease through a reasonable detox. But the rise in commodity costs snatched that option away. Patrons still refused to step through the front door unless they were offered a steal. But the bargains were harder for operators to swallow because ingredients like tomatoes and beef were costing a lot more at the back door.
Voila: The World’s Greatest Vise, a.k.a. the after-Recession squeeze on margins.
Commodity prices are difficult to cover because they’re slipperier than an eel with a law degree. The direction can shift profoundly, one way or another, in a matter of days or weeks.
But recent headlines suggest we’re seeing just the beginning of the climb.
Consider, for instance, one little-noticed effect of last week’s tornadoes in the Southeast. The twisters hit nearly 400 chicken coops in Alabama alone, or roughly 25% of the state’s bird-rearing facilities. The Wall Street Journal reported that about 5 million birds were killed, putting an extreme crimp in supply.
That devastation came as chains like Wendy’s were tinkering with new chicken sandwiches, a move interpreted by many observers as a reaction to soaring beef prices.
The good news: Chickens require only about six weeks to reach maturity. If facilities can be repaired and flocks replenished, the damage could presumably be offset quickly.
Not so with sugar. The Journal, a real bummer this past week, reported that domestic crops of sugar cane were undercut by Florida’s cold snap in December.
Yet to be determined, it added, is the effect of flooding on Midwest areas that cultivate sugar beets. The experts are gauging how the rainfall affected plantings for the spring and summer growing season.
And, just to put that (unsweetened) cherry on top, the paper noted that the U.S. government is tightening the cap on sugar imports.
Not that the worldwide market is awash in the stuff. Bloomberg reported a few months ago that cyclones destroyed much of Australia’s sugar-producing fields. The European Union had already addressed the issue.
So had the United States. Farmers had indicated an intention to cultivate more sugar beets to exploit the worldwide opportunity. Oh, well.
At least families won’t have to use as much gas this summer to take in cultural sites like House o’ Mud, Alligatorville and Michigan’s Largest Ball of String.
Maybe they’ll use the savings to buy a drive-thru burger—at full price.
Showing posts with label value menus. Show all posts
Showing posts with label value menus. Show all posts
Wednesday, May 4, 2011
Friday, January 7, 2011
Sociologists in the dining room
Restaurateurs have to master a slew of jobs if they hope to succeed: Marketer, artist, trainer, buyer, motivational speaker, equipment repairman, even plumber. Now market conditions are requiring them to add a new title to the list: Sociologist.
Economists and politicians have noted during the new-year fit of prognostication that two seismic shifts are our shaking our culture. Both promise to profoundly change who restaurants serve, and how.
Indeed, the impact of one is already evident in New York City, Los Angeles, Las Vegas and the other wellsprings of mainstream trends. Experts give it names like “income gap, “ “wage discrepany” and “economic polarization.” Simply put, it’s the tendency of the rich to get richer while the middle and lower classes struggle harder to hold onto what they have.
Fine-dining places have noticed. Many are resorting to the sort of big-ticket indulgences that we saw in the 1990s—astronomically priced meals, decadent specialties and beverages, and high-priced experiences like having the chef devoted for the night to a single party’s service.
Some are installing a mini-restaurant within their dining rooms to serve the financial wildcats who’re collecting six and seven-figure bonuses again. In Las Vegas, high rollers can indulge at Shaboo, a dining room inside BarMasa, an outlet of famed sushi chef Masa Takayama. In Washington, D.C., powerbrokers vie for one of the few seats at Minibar, the exclusive sub-eatery of Jose Andres’ Café Atlantico.
Ironically, that tangent is coming as the rest of the industry veers in the direction of value. The Sonic drive-inn chain recently explained to investors that it was keeping the introductory reduced price of a revamped hotdog, even though the freeze kept check averages flat. Then again, maybe that’s the objective, given consumers’ ongoing propensity to sticker shock.
Consider that even fast-casual chains like Fazoli’s are adding lower priced (and lower calorie) small plates.
A new study commissioned by Tyson Foodservice shows that the five strongest draws for restaurant customers today are all value-related (in descending order, two-for-ones, dollar menus, discounts, price promotions, and full-service restaurants' combo deals.)
All things considered, you can’t help but conclude he industry is drifting toward either end of the socio-economic spectrum, just like society itself.
At the same time, and not coincidentally, some commentators have noted an historic shift in the earning potential of blue-collar Americans. When U.S. automobile factories and steel mills were booming, workers could afford a comfortable middleclass life. Now many of those jobs have disappeared, and plenty of the remaining manufacturing line posts are paying far less. There’s less money left for dining out.
Yet virtually every mainstream fast-food concept would attest that its core user—the legendary superheavy user—is a blue collar male between 19 and 35 years old.
That foundation market may be eroding, which explains why there’s a clear drift in the design of quick-service places toward more residential designs. They’re trying to position themselves as the places where youngsters can comfortably hang out and be entertained while they munch and sip. The settings are intended to make moms comfortable, too.
Both trends are slow moving. The restaurant industry appears to be adjusting quickly. Just ask any sociologist.
Economists and politicians have noted during the new-year fit of prognostication that two seismic shifts are our shaking our culture. Both promise to profoundly change who restaurants serve, and how.
Indeed, the impact of one is already evident in New York City, Los Angeles, Las Vegas and the other wellsprings of mainstream trends. Experts give it names like “income gap, “ “wage discrepany” and “economic polarization.” Simply put, it’s the tendency of the rich to get richer while the middle and lower classes struggle harder to hold onto what they have.
Fine-dining places have noticed. Many are resorting to the sort of big-ticket indulgences that we saw in the 1990s—astronomically priced meals, decadent specialties and beverages, and high-priced experiences like having the chef devoted for the night to a single party’s service.
Some are installing a mini-restaurant within their dining rooms to serve the financial wildcats who’re collecting six and seven-figure bonuses again. In Las Vegas, high rollers can indulge at Shaboo, a dining room inside BarMasa, an outlet of famed sushi chef Masa Takayama. In Washington, D.C., powerbrokers vie for one of the few seats at Minibar, the exclusive sub-eatery of Jose Andres’ Café Atlantico.
Ironically, that tangent is coming as the rest of the industry veers in the direction of value. The Sonic drive-inn chain recently explained to investors that it was keeping the introductory reduced price of a revamped hotdog, even though the freeze kept check averages flat. Then again, maybe that’s the objective, given consumers’ ongoing propensity to sticker shock.
Consider that even fast-casual chains like Fazoli’s are adding lower priced (and lower calorie) small plates.
A new study commissioned by Tyson Foodservice shows that the five strongest draws for restaurant customers today are all value-related (in descending order, two-for-ones, dollar menus, discounts, price promotions, and full-service restaurants' combo deals.)
All things considered, you can’t help but conclude he industry is drifting toward either end of the socio-economic spectrum, just like society itself.
At the same time, and not coincidentally, some commentators have noted an historic shift in the earning potential of blue-collar Americans. When U.S. automobile factories and steel mills were booming, workers could afford a comfortable middleclass life. Now many of those jobs have disappeared, and plenty of the remaining manufacturing line posts are paying far less. There’s less money left for dining out.
Yet virtually every mainstream fast-food concept would attest that its core user—the legendary superheavy user—is a blue collar male between 19 and 35 years old.
That foundation market may be eroding, which explains why there’s a clear drift in the design of quick-service places toward more residential designs. They’re trying to position themselves as the places where youngsters can comfortably hang out and be entertained while they munch and sip. The settings are intended to make moms comfortable, too.
Both trends are slow moving. The restaurant industry appears to be adjusting quickly. Just ask any sociologist.
Thursday, February 25, 2010
BK's new breakfast items--and ongoing pricing mess
Any commandos looking for near-term work in the Miami area? Some of us are considering a raid on Burger King’s headquarters to rescue the chain’s menu-development team. Management must be working them 24/7 to get the sort of product output we’ve been seeing, and the volume is about to increase with the rollout of several new breakfast items.
Those additions will include a new muffin sandwich and a breakfast bowl, according to executives of Carrols Corp., the chain’s largest franchisee and a likely sympathizer with our mission. In talking with investors today, the officials indicated they’re not exactly overjoyed with the products pouring out of the franchisor’s test kitchens.
Indeed, analysts were advised during the conference call that Carrols can’t provide them with a general outlook for its Burger King restaurants because of “uncertainty regarding the impact of new product introductions,” in the words of CFO Paul Flanders.
He and his colleagues explained that next in the staging area for BK are a number of higher-priced items, including ribs and additions to the XT premium burger line. Although Carrols is “cautiously optimistic” about the sales prospects for those additions, the ka-ching may not be as loud as BK hopes because of tight consumer spending and widespread discounting by competitors, said president Dan Accordino.
Carrols noted that its BK units were selling only 24 Steak House XT burgers a day, though supporting advertising had yet to begin. Still, “I’m not certain that the units are going to be terribly significant,” said Flanders.
That’s not to say aggressive discounting has worked well for BK, either, Accordino remarked. He cited the chain’s controversial $1 double cheeseburger, a product other franchisees have slammed as a giveaway that costs them money.
The bargain-priced item isn’t delivering sustained sales, contrary to the chain’s hopes, Accordino explained. Orders have tapered off since the deal was introduced last fall, with comp sales at Carrols’ BK units falling about 8% year-over-year during the first six weeks of 2010, the stock analysts learned.
Even with that decline, the $1 double accounts for 10% of sales at Carrol’s BK units. However, “while we're selling a lot of sandwiches, our incidence of drink and fry add-ons is not that high, making the gross profit contribution less appealing than we had hoped,” Accordino said.
That’s on top of the margin damage fellow franchisees had feared, he indicated.
The assessment is damning for BK because Carrols was one of the franchisees that remained loyal to the home office after fellow licensees sued to kill the double deal. The franchisor eventually agreed to reformulate the sandwich, taking out a slice of cheese and holding the $1 price. The true double cheeseburger (two patties, two slices of cheese) is being repriced at $1.19.
That overhaul will bring the $1 sandwich’s food cost below 50%, said Carrols CEO Alan Vituli. More importantly, he suggested, the $1.19 double cheeseburger might wean customers off what BK has termed “extreme affordability.”
“What we’re experiencing is that extreme affordability is converting too many of our core customers to extreme bargain seekers with no interest in looking beyond the extreme market,” Vituli said.
Those additions will include a new muffin sandwich and a breakfast bowl, according to executives of Carrols Corp., the chain’s largest franchisee and a likely sympathizer with our mission. In talking with investors today, the officials indicated they’re not exactly overjoyed with the products pouring out of the franchisor’s test kitchens.
Indeed, analysts were advised during the conference call that Carrols can’t provide them with a general outlook for its Burger King restaurants because of “uncertainty regarding the impact of new product introductions,” in the words of CFO Paul Flanders.
He and his colleagues explained that next in the staging area for BK are a number of higher-priced items, including ribs and additions to the XT premium burger line. Although Carrols is “cautiously optimistic” about the sales prospects for those additions, the ka-ching may not be as loud as BK hopes because of tight consumer spending and widespread discounting by competitors, said president Dan Accordino.
Carrols noted that its BK units were selling only 24 Steak House XT burgers a day, though supporting advertising had yet to begin. Still, “I’m not certain that the units are going to be terribly significant,” said Flanders.
That’s not to say aggressive discounting has worked well for BK, either, Accordino remarked. He cited the chain’s controversial $1 double cheeseburger, a product other franchisees have slammed as a giveaway that costs them money.
The bargain-priced item isn’t delivering sustained sales, contrary to the chain’s hopes, Accordino explained. Orders have tapered off since the deal was introduced last fall, with comp sales at Carrols’ BK units falling about 8% year-over-year during the first six weeks of 2010, the stock analysts learned.
Even with that decline, the $1 double accounts for 10% of sales at Carrol’s BK units. However, “while we're selling a lot of sandwiches, our incidence of drink and fry add-ons is not that high, making the gross profit contribution less appealing than we had hoped,” Accordino said.
That’s on top of the margin damage fellow franchisees had feared, he indicated.
The assessment is damning for BK because Carrols was one of the franchisees that remained loyal to the home office after fellow licensees sued to kill the double deal. The franchisor eventually agreed to reformulate the sandwich, taking out a slice of cheese and holding the $1 price. The true double cheeseburger (two patties, two slices of cheese) is being repriced at $1.19.
That overhaul will bring the $1 sandwich’s food cost below 50%, said Carrols CEO Alan Vituli. More importantly, he suggested, the $1.19 double cheeseburger might wean customers off what BK has termed “extreme affordability.”
“What we’re experiencing is that extreme affordability is converting too many of our core customers to extreme bargain seekers with no interest in looking beyond the extreme market,” Vituli said.
Friday, February 5, 2010
Some blunt words about Pizza Hut & KFC
It’s not unusual for chain executives to pass long customers’ opinions of their brands. It’s another matter for the officials to relate the slams along with the gushing praise, especially while talking to investors. Yet, in a refreshing burst of candor, that’s exactly what the CEO of Yum! Brands did Thursday during a conference call about the company’s fast-food chains, Taco Bell, KFC and Pizza Hut.
Chief executive David Novak had the harshest words for Pizza Hut’s domestic operations, whose same-store sales fell a head-turning 12% during the last three months of 2009. Oh, sure, the American public loves the chain’s pizza, said Novak, but “the consumer has told us frankly that we are simply too expensive.” He noted that the venerable chain is also focusing on service speed and kitchen operations, so you have to suspect that customers aren’t tossing bouquets in those directions, either.
Novak said the chain is countering its high-price stigma with the “successfully tested” Any Way You Want It promotion, where patrons can get a customized pie for $10.
And how about KFC’s domestic operations? Oy, don’t ask.
“There is no question we have our work cut out for us,” Novak told analysts on the conference call. He ticked off the chain’s three main perception problems in the U.S.: Too much fried food, not enough value, and lousy operations.
The first two objections from customers have been addressed, he said. Indeed, KFC’s new Kentucky Grilled Chicken now accounts for a fourth of all the chicken on the bone sold by the chain.
But operations still have a ways to go, particularly in terms of service speed and not running out of some menu items before the next batch of supplies arrive, Novak acknowledged.
He had nothing but praise for Taco Bell, describing it as one of the company’s sales and profit workhorses, with ample room left to grow in the U.S. market.
The domestic arms of Pizza Hut and KFC, on the other hand, weren’t even addressed when Yum! gathered analysts in New York a few months ago for a close-up look at the company’s inner workings. “we made the conscious decision to not even cover Pizza Hut and KFC U.S. at the December analyst meeting,” he noted.
Then again, those pieces of the business still seem to be held in higher regard than Yum’s two other American fast-food brands, Long John Silver’s and A&W. “[I’m] wondering whether there is a potential to sell those brands or whether we'll see those brands continue to operate here as it relates to generating incremental cash,” Jeffrey Bernstein, the restaurant analyst for Barclays Capital, asked the Yum officials on the call.
“Our goal with Long John Silver and A&W is to make those brands stronger and to build them working with our franchisees,” countered Novak.
Chief executive David Novak had the harshest words for Pizza Hut’s domestic operations, whose same-store sales fell a head-turning 12% during the last three months of 2009. Oh, sure, the American public loves the chain’s pizza, said Novak, but “the consumer has told us frankly that we are simply too expensive.” He noted that the venerable chain is also focusing on service speed and kitchen operations, so you have to suspect that customers aren’t tossing bouquets in those directions, either.
Novak said the chain is countering its high-price stigma with the “successfully tested” Any Way You Want It promotion, where patrons can get a customized pie for $10.
And how about KFC’s domestic operations? Oy, don’t ask.
“There is no question we have our work cut out for us,” Novak told analysts on the conference call. He ticked off the chain’s three main perception problems in the U.S.: Too much fried food, not enough value, and lousy operations.
The first two objections from customers have been addressed, he said. Indeed, KFC’s new Kentucky Grilled Chicken now accounts for a fourth of all the chicken on the bone sold by the chain.
But operations still have a ways to go, particularly in terms of service speed and not running out of some menu items before the next batch of supplies arrive, Novak acknowledged.
He had nothing but praise for Taco Bell, describing it as one of the company’s sales and profit workhorses, with ample room left to grow in the U.S. market.
The domestic arms of Pizza Hut and KFC, on the other hand, weren’t even addressed when Yum! gathered analysts in New York a few months ago for a close-up look at the company’s inner workings. “we made the conscious decision to not even cover Pizza Hut and KFC U.S. at the December analyst meeting,” he noted.
Then again, those pieces of the business still seem to be held in higher regard than Yum’s two other American fast-food brands, Long John Silver’s and A&W. “[I’m] wondering whether there is a potential to sell those brands or whether we'll see those brands continue to operate here as it relates to generating incremental cash,” Jeffrey Bernstein, the restaurant analyst for Barclays Capital, asked the Yum officials on the call.
“Our goal with Long John Silver and A&W is to make those brands stronger and to build them working with our franchisees,” countered Novak.
Wednesday, January 27, 2010
Copycat killers?
Have some mercy, fast-food chains.
You’ve already swiped a horde of customers from casual dining. Do you have to steal the sector’s best defense, too?
Yet there’s no denying the recent raids by higher-end brands. Consider the newest offer from Qdoba: Craft 2, a mix-and-match deal for bargain-hunters who prize variety as much as volume. The offer invites customers to build a meal by combining two Qdoba favorites, all for $5.99.
Sounds a little like Applebee’s 2 for $20 deal, doesn’t it? Or is it Chili’s 3 for $20? T.G.I. Friday’s 3 for $12.99, maybe?
Mix-and-match deals have become as commonplace in casual dining as deep-fried onion product, bloomin’, straws or otherwise. They’ve been a leading way—perhaps the leading way—for big brands to provide the value that consumers now regard as a non-negotiable.
Fast-food chains could offer better prices on products common to both segments, like burgers or salads. But filling platters or serving up multiple courses was something only the full-service chains seemed able to pull off.
Well, not anymore. A few weeks before Qdoba started hawking its mix-and-match deal, Quiznos lifted the napkin off its new Choose Two deal. Patrons are invited to make a meal of any two items off the sandwich chain’s menu, all for $5.
Is there any doubt that other fast feeders will follow?
You’ve already swiped a horde of customers from casual dining. Do you have to steal the sector’s best defense, too?
Yet there’s no denying the recent raids by higher-end brands. Consider the newest offer from Qdoba: Craft 2, a mix-and-match deal for bargain-hunters who prize variety as much as volume. The offer invites customers to build a meal by combining two Qdoba favorites, all for $5.99.
Sounds a little like Applebee’s 2 for $20 deal, doesn’t it? Or is it Chili’s 3 for $20? T.G.I. Friday’s 3 for $12.99, maybe?
Mix-and-match deals have become as commonplace in casual dining as deep-fried onion product, bloomin’, straws or otherwise. They’ve been a leading way—perhaps the leading way—for big brands to provide the value that consumers now regard as a non-negotiable.
Fast-food chains could offer better prices on products common to both segments, like burgers or salads. But filling platters or serving up multiple courses was something only the full-service chains seemed able to pull off.
Well, not anymore. A few weeks before Qdoba started hawking its mix-and-match deal, Quiznos lifted the napkin off its new Choose Two deal. Patrons are invited to make a meal of any two items off the sandwich chain’s menu, all for $5.
Is there any doubt that other fast feeders will follow?
Friday, July 31, 2009
Discounting at the sterling level
How do you tactfully offer a bargain when your customers view you as a Mercedes-class experience? That’s the quandary facing Ruth’s Chris Steak House, a longtime favorite of the expense-account crowd.
The chain tried a bundled-meal deal—the equivalent of a Dollar Menu to the Gold Card set—in February. Patrons could have shrimp, a six-ounce filet or several other upscale entrees, packaged with a side and a dessert, for a mere $39.95. By the standards of that segment, this was dangerously close to a tie-in with a blockbuster summer movie.
The nod to value played well with Ruth’s clientele. “It has been well received by our guests and is representing a sizable portion of our sales mix,” CEO Mike O’Donnell told analysts during a conference call today.
Indeed, he seemed to suggest, the promo might’ve been too well received. The chain’s typical guest check fell 6.5%, to $70. Ruth’s was getting less per guest, which would’ve been fine if more guests were drawn by the head-turner.
But comp sales fell by more than 23%. The numbers indicate that traffic was down as well as the average check.
So what’s a high-end chain to do?
The chain is currently testing a bistro menu in the lounges of six restaurants. A second possibility, a $19.95 steak-and-fries platter, is being tested during the normally slow beginning of the week at three locations.
But the chain’s not abandoning its prix-fixe deal, at least not this summer. Apparently the company feels it was enough of a brake on the traffic decline to keep it in place. O’Donnell cited expectations that the value offer might catch on and hit an “inflection point,” where it becomes a boon to traffic, even though the average tab might slip by a few more dollars. And as he noted in response to a question on that point, patrons can “buy up” to a $49.95 version.
I guess it’s like trading up to a large drink.
The chain tried a bundled-meal deal—the equivalent of a Dollar Menu to the Gold Card set—in February. Patrons could have shrimp, a six-ounce filet or several other upscale entrees, packaged with a side and a dessert, for a mere $39.95. By the standards of that segment, this was dangerously close to a tie-in with a blockbuster summer movie.
The nod to value played well with Ruth’s clientele. “It has been well received by our guests and is representing a sizable portion of our sales mix,” CEO Mike O’Donnell told analysts during a conference call today.
Indeed, he seemed to suggest, the promo might’ve been too well received. The chain’s typical guest check fell 6.5%, to $70. Ruth’s was getting less per guest, which would’ve been fine if more guests were drawn by the head-turner.
But comp sales fell by more than 23%. The numbers indicate that traffic was down as well as the average check.
So what’s a high-end chain to do?
The chain is currently testing a bistro menu in the lounges of six restaurants. A second possibility, a $19.95 steak-and-fries platter, is being tested during the normally slow beginning of the week at three locations.
But the chain’s not abandoning its prix-fixe deal, at least not this summer. Apparently the company feels it was enough of a brake on the traffic decline to keep it in place. O’Donnell cited expectations that the value offer might catch on and hit an “inflection point,” where it becomes a boon to traffic, even though the average tab might slip by a few more dollars. And as he noted in response to a question on that point, patrons can “buy up” to a $49.95 version.
I guess it’s like trading up to a large drink.
Thursday, July 23, 2009
Chipotle offers update on value-menu test
Chipotle Mexican Grill said it will maintain the test of its new lower-priced menu items at the current single-market extent, though “we are seeing some encouraging signs,” co-CEO Steve Ells told financial analysts Wednesday. One of the more reassuring finds of the Denver sales trial, he explained, was the effect on check averages: Customers tended to spend the same amount, even though they could trade down to less-expensive options.
Co-tested with those value-oriented selections was a kids’ menu. “We have seen enough demand for our kids menu that we plan to test that part of the menu in all of our Salt Lake City restaurants as well,” Ells said.
CFO John Hartung noted that at least half of Chipotle’s new stores in 2010 will be conversions rather than newly built outlets.
Co-tested with those value-oriented selections was a kids’ menu. “We have seen enough demand for our kids menu that we plan to test that part of the menu in all of our Salt Lake City restaurants as well,” Ells said.
CFO John Hartung noted that at least half of Chipotle’s new stores in 2010 will be conversions rather than newly built outlets.
Friday, April 24, 2009
At a time of menu makeovers, BJ's resets the bar
It looks as if restaurant chains have been pumping espresso into their menu development staffs again. A current project requires me to study recent changes in the bills of fare for several dozen major concepts, and the turnover is astounding. An OSHA crackdown may be in the offing, because some test-kitchen crews are clearly being worked 'round the clock.
Next month could bring a new standard to beat. Yesterday the CEO of BJ’s Restaurants ticked off the changes that’ll be evident in the casual chain’s May menu—as “many as 25 to 27,” said Jerry Deitchle.
Included, he said, will be “10 to 12 new bar drink recipes,” an effort that complements BJ’s ongoing efforts to add more craft beers, upgrade its wine selection, and adopt a “more contemporary” non-alcoholic beverage program.
Other changes include the addition of two new full-size pizzas, a flatbread appetizer pizza, an “absolutely terrific” Thai shrimp lettuce wrap, a new version of Texas-style chicken-fried steak, an updated pot roast, a revamped an renamed Italian chopped salad, and new presentations of its crispy potato skins and meatloaf.
The overhaul was based on a what officials described as a gap analysis of what competitors didn’t offer.
“We didn’t look and say, gee, we need to have a $5.95 lunch bowl or some $5.95 lunch item or a $9 item that we could bring in there,” CFO Greg Levin told analysts during the conference call. It's not "a value perspective that maybe you’re seeing from of [our] peers."
Meanwhile, a store in Austin is testing BJ’s gamble that it can become “the premiere retailer of craft beer in casual dining,” in Deitchle’s words. He explained that BJ’s proprietary brews are “surrounded” by 24 craft beers on tap. The set-up increased the likelihood that patrons would order beer, and boosted the overall average check, he disclosed.
The extended array has already been rolled into at least 20 more stores, Deitchle indicated. “We’re still learning a bit from it,” he said, but “every economic and consumer indication has been very, very positive.”
At the same time, just to keep corporate chef Ray Martin busy, BJ’s is working on a new kids’ menu.
Deitchle mentioned that Martin would be rewarded for his work with a free nine-month cruise around the world. Actually, he didn’t say that, but I figured I’d plant the idea. I feel for you, Ray.
Next month could bring a new standard to beat. Yesterday the CEO of BJ’s Restaurants ticked off the changes that’ll be evident in the casual chain’s May menu—as “many as 25 to 27,” said Jerry Deitchle.
Included, he said, will be “10 to 12 new bar drink recipes,” an effort that complements BJ’s ongoing efforts to add more craft beers, upgrade its wine selection, and adopt a “more contemporary” non-alcoholic beverage program.
Other changes include the addition of two new full-size pizzas, a flatbread appetizer pizza, an “absolutely terrific” Thai shrimp lettuce wrap, a new version of Texas-style chicken-fried steak, an updated pot roast, a revamped an renamed Italian chopped salad, and new presentations of its crispy potato skins and meatloaf.
The overhaul was based on a what officials described as a gap analysis of what competitors didn’t offer.
“We didn’t look and say, gee, we need to have a $5.95 lunch bowl or some $5.95 lunch item or a $9 item that we could bring in there,” CFO Greg Levin told analysts during the conference call. It's not "a value perspective that maybe you’re seeing from of [our] peers."
Meanwhile, a store in Austin is testing BJ’s gamble that it can become “the premiere retailer of craft beer in casual dining,” in Deitchle’s words. He explained that BJ’s proprietary brews are “surrounded” by 24 craft beers on tap. The set-up increased the likelihood that patrons would order beer, and boosted the overall average check, he disclosed.
The extended array has already been rolled into at least 20 more stores, Deitchle indicated. “We’re still learning a bit from it,” he said, but “every economic and consumer indication has been very, very positive.”
At the same time, just to keep corporate chef Ray Martin busy, BJ’s is working on a new kids’ menu.
Deitchle mentioned that Martin would be rewarded for his work with a free nine-month cruise around the world. Actually, he didn’t say that, but I figured I’d plant the idea. I feel for you, Ray.
Tuesday, March 3, 2009
Arby's tries a Jan Brady strategy
Who would’ve picked Wendy’s as the better performer for its new parent? Yet the burger chain clearly left its sister, the Arby’s sandwich concept, getting cold under the heat lamps at the end of 2008.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.
Friday, February 13, 2009
Cheesecake tries snacks
Fast feeders aren't the only chains trying to lure more customers with snacks. Executives of The Cheesecake Factory say the new winter menu now in 36 of its stores features an array of snacks and small plates.
"They are very, very well priced," CEO David Overton commented during yesterday's conference call with financial analysts. "You can order two or three of them as you would one."
He indicated that the menu would be rolled to all stores within the next month.
The value appeal of the snacks and small plates is apparently meant to complement the bargains offered on what the chain calls its "special menu," an array of toothsome entrees priced at $11.95 to $12.95. Those selections are currently in "most of our restaurants, [but] not 100%," Overton said.
"They are very, very well priced," CEO David Overton commented during yesterday's conference call with financial analysts. "You can order two or three of them as you would one."
He indicated that the menu would be rolled to all stores within the next month.
The value appeal of the snacks and small plates is apparently meant to complement the bargains offered on what the chain calls its "special menu," an array of toothsome entrees priced at $11.95 to $12.95. Those selections are currently in "most of our restaurants, [but] not 100%," Overton said.
Thursday, February 12, 2009
What're the pacesetters trying next?
Three of the industry’s most closely monitored performers conferred with their investors yesterday in quarterly conference calls. Apparently the SEC has quietly changed its regulations to require that each confab include questions about bundled meals and other ways of coaxing open tightly clutched wallets. Here are some of the highlights:
McDonald’s is the indisputable king of fast-food, based on its consistently strong financial results. By the same gauge, you’d have to give the crown in casual dining to Buffalo Wild Wings.
Comp sales for the first three months of Wild Wings' fiscal 2009 are running at 7% for franchises, 8% for company stores, CEO Sally Smith told investors yesterday. No one else in the sector is coming close to those sorts of gains.
Smith also detailed some of the new products slated for rollouts, and they’re absolutely brilliant—because they’re so simple. For instance, one of the new items is merely a twist on chicken fingers, quite literally. Twisted Chicken is exactly that.
Those products are being readied after the introduction late last year of flat-bread items that intended to be dipped before they're munched. Sauces, developed for BWW’s wings, are one of the chain’s signatures.
The other new items—barbecue-flavored nachos and Pepperoni Kickers, presumably a type of appetizer—are also simple extensions, which promise to keep serving times tight.
Executives noted that BWW opened 67 stores last year, and has $44.5 million in cash and marketable securities on hand.
Chipotle clearly feels it’s no bank in a bailout situation. The chain said categorically that it would not cut 2008 bonuses across the board for restaurant managers, a reflection of that position’s importance and the stellar performance of many doing the job. If they excelled, execs indicated, they’ll be collecting their promised incentive pay-outs.
Nor is the chain following the lead of Starbucks and virtually the rest of the industry by bundling menu items into bargain-priced packages. The approach would work against Chipotle’s founding principle of customizing each order, executives explained.
But, they acknowledged, the chain is experimenting with new menu boards that may be less intimidating to first-time visitors. A new set-up might also help regulars discover new flavor or meal combinations, they added, though they weren’t forthcoming with details.
P.F. Chang’s is testing several ways to underscore value at its Pei Wei Asian Diner fast-casual concept, including portion cuts with an accompanying price rollback, executives said during their conference call yesterday.
“We’re looking at offering some of the existing products in a smaller portion, smaller price opportunity. We are looking at the possibility of doing some more all-inclusive dining opportunities. And then we are also evaluating the general format of the menu as it sits today in relationship to its current price,” said co-CEO Rick Federico.
He also cited the possibility of doing bundled meals, where a drink, cup of soup, side salad or spring roll could be offered as part of the meal. And, he said, nine stores are offering certain meals as bowls instead of a plated offering.
Federico said the concept has evolved into more of a low-priced alternative to casual restaurants instead of a true quick-casual place, which has been “a bit of a competitive disadvantage.” Part of the remedy, he said, will be a step-up in the development of new menu items.
He also acknowledged under questioning that the company may hire someone out of the fast-casual sector to lead Pei Wei, which has been without a president since Russell Owens resigned late last year.
P.F. Chang’s closed 10 Pei Weis last year.
McDonald’s is the indisputable king of fast-food, based on its consistently strong financial results. By the same gauge, you’d have to give the crown in casual dining to Buffalo Wild Wings.
Comp sales for the first three months of Wild Wings' fiscal 2009 are running at 7% for franchises, 8% for company stores, CEO Sally Smith told investors yesterday. No one else in the sector is coming close to those sorts of gains.
Smith also detailed some of the new products slated for rollouts, and they’re absolutely brilliant—because they’re so simple. For instance, one of the new items is merely a twist on chicken fingers, quite literally. Twisted Chicken is exactly that.
Those products are being readied after the introduction late last year of flat-bread items that intended to be dipped before they're munched. Sauces, developed for BWW’s wings, are one of the chain’s signatures.
The other new items—barbecue-flavored nachos and Pepperoni Kickers, presumably a type of appetizer—are also simple extensions, which promise to keep serving times tight.
Executives noted that BWW opened 67 stores last year, and has $44.5 million in cash and marketable securities on hand.
Chipotle clearly feels it’s no bank in a bailout situation. The chain said categorically that it would not cut 2008 bonuses across the board for restaurant managers, a reflection of that position’s importance and the stellar performance of many doing the job. If they excelled, execs indicated, they’ll be collecting their promised incentive pay-outs.
Nor is the chain following the lead of Starbucks and virtually the rest of the industry by bundling menu items into bargain-priced packages. The approach would work against Chipotle’s founding principle of customizing each order, executives explained.
But, they acknowledged, the chain is experimenting with new menu boards that may be less intimidating to first-time visitors. A new set-up might also help regulars discover new flavor or meal combinations, they added, though they weren’t forthcoming with details.
P.F. Chang’s is testing several ways to underscore value at its Pei Wei Asian Diner fast-casual concept, including portion cuts with an accompanying price rollback, executives said during their conference call yesterday.
“We’re looking at offering some of the existing products in a smaller portion, smaller price opportunity. We are looking at the possibility of doing some more all-inclusive dining opportunities. And then we are also evaluating the general format of the menu as it sits today in relationship to its current price,” said co-CEO Rick Federico.
He also cited the possibility of doing bundled meals, where a drink, cup of soup, side salad or spring roll could be offered as part of the meal. And, he said, nine stores are offering certain meals as bowls instead of a plated offering.
Federico said the concept has evolved into more of a low-priced alternative to casual restaurants instead of a true quick-casual place, which has been “a bit of a competitive disadvantage.” Part of the remedy, he said, will be a step-up in the development of new menu items.
He also acknowledged under questioning that the company may hire someone out of the fast-casual sector to lead Pei Wei, which has been without a president since Russell Owens resigned late last year.
P.F. Chang’s closed 10 Pei Weis last year.
Monday, January 19, 2009
Wendy's goes a little 3-kee
Wendy’s new commercials are raising eyebrows among the intelligentsia. Could a chain with a red-pigtailed mascot be using an unconventional but popular theory of economics as the new slogan for its value menu? Did it pass on “Wendy’s/Supply side in action” before settling on the new catchphrase, “Freakonomics?”
Most definitely not, because the term is actually “3conomics,” a reference to the value menu’s inclusion of three sandwiches, or apparently more than the other brands sport. But the subtle difference in the phrases is being missed by a lot of people, including Steven D. Levitt, the University of Chicago professor who forged the economic theory.
I saw the commercial and admittedly wondered how Wendy’s had secured licensing rights to “Freakonomics,” the subject of a best-selling, must-read book for any student of business. I didn’t catch the “3conomics” reference until the controversy erupted. Nor did the goodly number of fellow bloggers and commentators. Many wondered how Levitt could allow his term to be put to such crassly commercial use
I’m surprised there also wasn’t more discussion about the whole approach of the campaign. Clearly the chain’s new parent, Wendy’s/Arby’s Group, is trying to harness to the same sort of zaniness that works for Burger King. Apparently there’s a large segment of the population that maintains, “Wow, this brand is really off-the-wall. Think I’ll go have one of their burgers.”
Then again, the approach has worked stunningly well for BK and its creepy mascot, the King.
But contriving to be irreverent and kooky is a risky move. It’s too dangerous to come across as insincere and fake—the Monkeys compared with the Beatles.
And it’s hard to be genuinely in touch with the quirky tastes of the youngsters targeted in such efforts. That’s the true brilliance, if you can call it that, of BK’s marketing. Consider, for instance, this online cult favorite of the chain, known as “Eat like snake.”
Most definitely not, because the term is actually “3conomics,” a reference to the value menu’s inclusion of three sandwiches, or apparently more than the other brands sport. But the subtle difference in the phrases is being missed by a lot of people, including Steven D. Levitt, the University of Chicago professor who forged the economic theory.
I saw the commercial and admittedly wondered how Wendy’s had secured licensing rights to “Freakonomics,” the subject of a best-selling, must-read book for any student of business. I didn’t catch the “3conomics” reference until the controversy erupted. Nor did the goodly number of fellow bloggers and commentators. Many wondered how Levitt could allow his term to be put to such crassly commercial use
I’m surprised there also wasn’t more discussion about the whole approach of the campaign. Clearly the chain’s new parent, Wendy’s/Arby’s Group, is trying to harness to the same sort of zaniness that works for Burger King. Apparently there’s a large segment of the population that maintains, “Wow, this brand is really off-the-wall. Think I’ll go have one of their burgers.”
Then again, the approach has worked stunningly well for BK and its creepy mascot, the King.
But contriving to be irreverent and kooky is a risky move. It’s too dangerous to come across as insincere and fake—the Monkeys compared with the Beatles.
And it’s hard to be genuinely in touch with the quirky tastes of the youngsters targeted in such efforts. That’s the true brilliance, if you can call it that, of BK’s marketing. Consider, for instance, this online cult favorite of the chain, known as “Eat like snake.”
Sunday, December 28, 2008
A genetically altered Cheesecake Factory?
Cheesecake Factory opened the first of its new downsized restaurants this month, a departure from the pricey cathedrals that’ve been a hallmark of the concept since its earliest days. Now it has a smaller, less-expensive prototype, just like everyone else in casual dining.
That concession to the times follows the addition of a menu section consisting solely of bargains, an asterisk to the chain’s positioning as a place of indulgence, as its luscious cakes or huge portions attest. Now deal hunters will find the same sort of values they might seek on other Friday or Saturday nights at Red Lobster, McCormick & Schmick’s, Outback or Mortons.
Point by point, the once high-flying chain is addressing the issues that have tempered its phenomenal financial success. But, in the process, is it engineering its way into one of casual dining’s biggest problems? Is it sacrificing dramatic points of differentiation to become like everyone else in the pack?
If I’m typical of Cheesecake’s fan base, patrons go there because the experience is over-the-top, from the 200-item menu to the portions, the unusual choices (Navajo Sandwich, anyone?) and the dramatic settings (insider’s note: Look for a sky scene in your local unit, a concession to the religious orientation of longtime leader David Overton). It’s not an overstatement to say it provides a sense of awe.
But awe doesn’t sell in this tight-walleted environment. Bargains, economy and accessibility are today’s stock in trade. Still, by curbing what’s been in its DNA to embrace those head-turning qualities, is Cheesecake thinking merely for the short term? Certainly this economic situation is a crisis, and hence by definition a passing pain.
I’ll be the first to admit that it’s easy for me to second guess one of the industry’s most successful executive teams. I don’t have investors, executives, landlords and employees looking to me to pull the concept out of the doldrums.
But I hope Cheesecake doesn’t sacrifice the counter-intuitiveness that made that brand a stellar success. When everyone was going for streamlined menus, it maintained a tome of fare. When nods to healthfulness were the order of the day, it continued to serve selections that could have fed whole Caribbean islands. When competitors shotgunned units into the market like space invaders focusing on street corners and malls, it grew slowly and with painstaking selection of sites (to the best of my recollection, it’s never had to close a restaurant).
It needs to think in evolutionary terms—how to tailor the brand to the times. Merely co-opting what’s worked for other casual-dining concepts is de-evolution of the worst kind. I hope the folks in Calabasas Hills are careful about how they navigate these perilous times. Otherwise, they’ll just be jumping the shark.
That concession to the times follows the addition of a menu section consisting solely of bargains, an asterisk to the chain’s positioning as a place of indulgence, as its luscious cakes or huge portions attest. Now deal hunters will find the same sort of values they might seek on other Friday or Saturday nights at Red Lobster, McCormick & Schmick’s, Outback or Mortons.
Point by point, the once high-flying chain is addressing the issues that have tempered its phenomenal financial success. But, in the process, is it engineering its way into one of casual dining’s biggest problems? Is it sacrificing dramatic points of differentiation to become like everyone else in the pack?
If I’m typical of Cheesecake’s fan base, patrons go there because the experience is over-the-top, from the 200-item menu to the portions, the unusual choices (Navajo Sandwich, anyone?) and the dramatic settings (insider’s note: Look for a sky scene in your local unit, a concession to the religious orientation of longtime leader David Overton). It’s not an overstatement to say it provides a sense of awe.
But awe doesn’t sell in this tight-walleted environment. Bargains, economy and accessibility are today’s stock in trade. Still, by curbing what’s been in its DNA to embrace those head-turning qualities, is Cheesecake thinking merely for the short term? Certainly this economic situation is a crisis, and hence by definition a passing pain.
I’ll be the first to admit that it’s easy for me to second guess one of the industry’s most successful executive teams. I don’t have investors, executives, landlords and employees looking to me to pull the concept out of the doldrums.
But I hope Cheesecake doesn’t sacrifice the counter-intuitiveness that made that brand a stellar success. When everyone was going for streamlined menus, it maintained a tome of fare. When nods to healthfulness were the order of the day, it continued to serve selections that could have fed whole Caribbean islands. When competitors shotgunned units into the market like space invaders focusing on street corners and malls, it grew slowly and with painstaking selection of sites (to the best of my recollection, it’s never had to close a restaurant).
It needs to think in evolutionary terms—how to tailor the brand to the times. Merely co-opting what’s worked for other casual-dining concepts is de-evolution of the worst kind. I hope the folks in Calabasas Hills are careful about how they navigate these perilous times. Otherwise, they’ll just be jumping the shark.
Tuesday, December 16, 2008
BK takes a Shot on sliders
Burger King’s sliders have arrived. A midtown Manhattan unit sports a sign today announcing the addition of BK Burger Shots, two flame-broiled mini-burgers priced at a mere $1.49 for the pair. Other markets are already airing commercials for the burger-ettes, available with or without cheese, according to blog posts.
A rollout of sliders had been expected since late spring by those who care about such things. In May, BK generated considerable buzz in the United Kingdom by adding a clever take-off on the slider, a uniquely American product. The Angus 6 Pack consisted of an oversized, scalloped-edged burger patty served on a similarly misshapen roll. The patty was actually six connected sliders, or miniature burgers, and the roll was similarly a six-in-one. A customer tore the burger and bun into six individual sliders.
The Burger Shots are much different. Indeed, they look more like Hardee’s Little Thickburgers, a downsized version of that chain’s belly whoppers, than a true slider like White Castle’s bite-sized mini’s (my usual order: 10).
Their larger size may be the result of operational considerations. As I said in a blog written while I was still gainfully employed, BK tried a slider during the 1980s called the Burger Buddy. The little patties proved to be a production nightmare because they would slip through the slats of the conveyor belt inside BK’s charbroiler.
BK has yet to make a formal announcement of the Burger Shots, which were identified in the New York store as a limited-time product. But why should that be a surprise? Half of the things it does are introduced through stealth marketing campaigns.
A rollout of sliders had been expected since late spring by those who care about such things. In May, BK generated considerable buzz in the United Kingdom by adding a clever take-off on the slider, a uniquely American product. The Angus 6 Pack consisted of an oversized, scalloped-edged burger patty served on a similarly misshapen roll. The patty was actually six connected sliders, or miniature burgers, and the roll was similarly a six-in-one. A customer tore the burger and bun into six individual sliders.
The Burger Shots are much different. Indeed, they look more like Hardee’s Little Thickburgers, a downsized version of that chain’s belly whoppers, than a true slider like White Castle’s bite-sized mini’s (my usual order: 10).
Their larger size may be the result of operational considerations. As I said in a blog written while I was still gainfully employed, BK tried a slider during the 1980s called the Burger Buddy. The little patties proved to be a production nightmare because they would slip through the slats of the conveyor belt inside BK’s charbroiler.
BK has yet to make a formal announcement of the Burger Shots, which were identified in the New York store as a limited-time product. But why should that be a surprise? Half of the things it does are introduced through stealth marketing campaigns.
Monday, December 8, 2008
Is BK trying to pull a fast one?
I've been trying to make sense of a story the Boston Herald ran last week about a change in the menus of Beantown's Burger King units. If I'm reading it correctly, the King should be thrown into the dungeon for a stretch, even if he is making a chump out of Red Sox fans. The article says the chain is telling shoppers they'll find new bargains on the menu, when in fact the "deals" are just the same old thing with a new label slapped on.
Last week, the story reports, the Boston-area restaurants rolled out the value menu the chain announced some time ago. "Problem is," writes Donna Goodison, "there's no value in the pricing."
The new value-sized soft drink, for instance, is what was formerly sold as the "small," at the same price, Goodison reports.
BK is sweetening its values in other ways, apparently. For instance, the story says what was sold as a medium drink is presented as the small, presumably at a lower price. That means the same for less.
It's surprising that the Home of the Whopper, one of fast-food's outstanding performers in recent years, would be so foolhardy as to risk alienating savvy customers at a time like this. Why dare to tarnish the crown?
Last week, the story reports, the Boston-area restaurants rolled out the value menu the chain announced some time ago. "Problem is," writes Donna Goodison, "there's no value in the pricing."
The new value-sized soft drink, for instance, is what was formerly sold as the "small," at the same price, Goodison reports.
BK is sweetening its values in other ways, apparently. For instance, the story says what was sold as a medium drink is presented as the small, presumably at a lower price. That means the same for less.
It's surprising that the Home of the Whopper, one of fast-food's outstanding performers in recent years, would be so foolhardy as to risk alienating savvy customers at a time like this. Why dare to tarnish the crown?
Sunday, November 23, 2008
Since we last met...
Sorry if I sound a little rusty. Since Nation’s Restaurant News laid me off Tuesday, I’ve not been blogging, at least about the restaurant business (though I have been doodling about my new status at Pink-slipped). I figured I’d clear some of the cobwebs by offering a few observations about the industry’s week that was:
Pretty soon T.G.I. Friday’s is going to start giving away living room sets with every meal you order. The casual chain’s frequent-guest program, Give Me More Stripes, started out with the usual bonuses for heavy traffic. Then it tried to sweeten the deal by throwing a free helping of chips and dip into the mix. Now the sector’s granddaddy is adding the whipped cream of a free dessert to any card carrier who visits a unit next weekend and buys an entree. I’m holding out for a steak-knives offer.
Taco Bell president Greg Creed has cajones bellgrande. First the chain proves it’s a badass by dissing 50 Cent. Last summer it suggested the mega-star reprise a Chihuahua’s role by serving as an unlikely pitchman for the Bell. Change your name to 79 Cent, 89 Cent or 99 Cent, the home office publicly offered, and we might be able to come through with bling-bling—a $10,000 payment to the charity of your choice [Thugs Without Bullets, perhaps? Teeth Grills for the Disadvantaged?). The proposal was put forth just as Taco Bell was rolling out a new value menu, an event that may not have snagged much publicity on its own. But Taco Bell tweaking a nasty mother like 50 Cent? Big news, dog.
50 Cent, the only rapper whose music I refuse to let my wife play when I’m in the car, responded with a lawsuit. He may try hard (and convincingly) to come off as a gangsta in the hood, but he’s a brilliant businessman who’s not going to let his name be used gratis as part of a publicity ploy.
Taco Bell should’ve been grateful that the response wasn’t a drive-by. But instead of dropping the matter, it filed a blistering defense that accused the Gangsta Formerly Known as Curtis James Jackson III of not being able to take a joke.
Indeed, the Sept. 19 court filing, brought to light yesterday by the gossip site TMZ was one big bitch-slap (Fast Company called it “counter-blathering.”) Taco Bell alleged in its filed response that 50 Cent nee Jackson “has a well-publicized track record of making threats, starting feuds and filing lawsuits,” and that his suit was merely an attempt to “burnish his gangsta rapper persona.”
“Instead of responding to Taco Bell's sincere offer in the friendly and humorous spirit in which it was issued,” the suit reads, “Jackson launched an aggressive, offensive attack on Taco Bell in the press. In a heavily publicized sound bite, Jackson threatened legal action against Taco Bell stating, "When my legal team is finished with them, Taco Bell is going to have a new
corporate slogan: 'We messed with the bull and got the horns.'"
The filing—technically an “affirmative defense”--disputes or denies each on of 50 Cents’ assertions in turn. It then asks the court hearing the action to dismiss it and make the the rapper pay Taco Bell’s legal fees.
A heads up to Creed: Remember Tupac, my man.
Just think ‘pizza’ and your delivery order will be placed. Maybe we’re not there yet, but the major delivery chains are certainly inching closer to that Isaac Asimov-ian vision. Domino’s, a leader in online ordering, added the option last week of letting TiVo users put in for a pie via the set-top box. Papa John’s announced that it would try to protect IM fanatics from malnutrition by allowing them to buy a delivered pizza without leaving Facebook, an option that Pizza Hut started added in mid-Oct.
So, let us review. Want to order a pizza? You can now do it via your phone (cell or landline), computer, Facebook account, TiVo, video game, or text-messaging capability.
My money’s on Pizza Hut as the first to accept brainwave orders. The chain should just hope it doesn’t intercept any that were beamed by 50 Cent at its sister brand.
Pretty soon T.G.I. Friday’s is going to start giving away living room sets with every meal you order. The casual chain’s frequent-guest program, Give Me More Stripes, started out with the usual bonuses for heavy traffic. Then it tried to sweeten the deal by throwing a free helping of chips and dip into the mix. Now the sector’s granddaddy is adding the whipped cream of a free dessert to any card carrier who visits a unit next weekend and buys an entree. I’m holding out for a steak-knives offer.
Taco Bell president Greg Creed has cajones bellgrande. First the chain proves it’s a badass by dissing 50 Cent. Last summer it suggested the mega-star reprise a Chihuahua’s role by serving as an unlikely pitchman for the Bell. Change your name to 79 Cent, 89 Cent or 99 Cent, the home office publicly offered, and we might be able to come through with bling-bling—a $10,000 payment to the charity of your choice [Thugs Without Bullets, perhaps? Teeth Grills for the Disadvantaged?). The proposal was put forth just as Taco Bell was rolling out a new value menu, an event that may not have snagged much publicity on its own. But Taco Bell tweaking a nasty mother like 50 Cent? Big news, dog.
50 Cent, the only rapper whose music I refuse to let my wife play when I’m in the car, responded with a lawsuit. He may try hard (and convincingly) to come off as a gangsta in the hood, but he’s a brilliant businessman who’s not going to let his name be used gratis as part of a publicity ploy.
Taco Bell should’ve been grateful that the response wasn’t a drive-by. But instead of dropping the matter, it filed a blistering defense that accused the Gangsta Formerly Known as Curtis James Jackson III of not being able to take a joke.
Indeed, the Sept. 19 court filing, brought to light yesterday by the gossip site TMZ was one big bitch-slap (Fast Company called it “counter-blathering.”) Taco Bell alleged in its filed response that 50 Cent nee Jackson “has a well-publicized track record of making threats, starting feuds and filing lawsuits,” and that his suit was merely an attempt to “burnish his gangsta rapper persona.”
“Instead of responding to Taco Bell's sincere offer in the friendly and humorous spirit in which it was issued,” the suit reads, “Jackson launched an aggressive, offensive attack on Taco Bell in the press. In a heavily publicized sound bite, Jackson threatened legal action against Taco Bell stating, "When my legal team is finished with them, Taco Bell is going to have a new
corporate slogan: 'We messed with the bull and got the horns.'"
The filing—technically an “affirmative defense”--disputes or denies each on of 50 Cents’ assertions in turn. It then asks the court hearing the action to dismiss it and make the the rapper pay Taco Bell’s legal fees.
A heads up to Creed: Remember Tupac, my man.
Just think ‘pizza’ and your delivery order will be placed. Maybe we’re not there yet, but the major delivery chains are certainly inching closer to that Isaac Asimov-ian vision. Domino’s, a leader in online ordering, added the option last week of letting TiVo users put in for a pie via the set-top box. Papa John’s announced that it would try to protect IM fanatics from malnutrition by allowing them to buy a delivered pizza without leaving Facebook, an option that Pizza Hut started added in mid-Oct.
So, let us review. Want to order a pizza? You can now do it via your phone (cell or landline), computer, Facebook account, TiVo, video game, or text-messaging capability.
My money’s on Pizza Hut as the first to accept brainwave orders. The chain should just hope it doesn’t intercept any that were beamed by 50 Cent at its sister brand.
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