Full disclosure: The only stock I own is a dog-food brand. I like dogs more than I like stocks (and people). But I do pay a lot of attention to restaurant trading day-to-day and I have to say, it’s a fickle and crazy world. Let’s look at McDonald’s for example. The fast-food behemoth reported same-store sales growth of 4.5 percent in its U.S. stores in the fourth quarter and shares fell. Yeah, the bar is super high and it was a down day overall, but still. Also, people start complaining on Twitter about getting sick at Chipotle and its shares plummet. It’s not easy answering the bell every day. That’s for sure.
Here were the biggest headlines of the week:
GC’s new look might be the slickest buffet in history. It’s worth checking out if you haven’t already. The brand took inspiration from a residential kitchen, with tiled walls and food displayed on buffet bars, and really blew out a new prototype. This location features stone exterior features, wood-toned interior ceilings, a double-sided fireplace, and, most notably, 1,000 extra square feet in the dining space that, in previous designs, was reserved for the kitchen. The reimaging program will work its way through the 491-unit system, and carry the classic brand into the future.
You have to give McDonald’s credit: When the financials are rolling, the brand isn’t resting. Hot sales and tax reform are lining the brand’s pockets these days. In response, McDonald’s said it would invest $2.4 billion of capital in 2018 alone, and open about 1,000 new locations. Much of this will funnel into accelerating its Experience of the Future redesign across the system. Having visited one of these, I wasn’t sure what to make of it exactly. I will say this, though: Down the road, five years, maybe less, other brands will start this initiative well after McDonald’s has perfected it. It will kind of be like the early days of hybrid cars for Toyota competitors. Or something like that. Either way, this is a good run for McDonald’s. Let see where it ends up.
Barbecue is one of the country’s regional treasures, and that’s not going to change. Is it to blame for why few brands (if any, really) have been able to scale it across the country? That is part of it. The preparation and skill involved is another. Here in North Carolina, we can’t agree by zip code, let alone state lines. Vinegar, sauce, so on and so on and so on. I just don’t know if I can see any full-service brand really taking barbecue from coast to coast and in between. But you never know. Here’s a look at some national brands and what they’ve been through in regards to growth. Pictured is Sonny’s BBQ’s Head Pitmaster Bryan Mroczka.
During our Facebook Live series this week (check it out) somebody asked a question probably a lot of people did following this news: Why did Panera share before it hit? Well, I think that goes to show you the kind of brand Panera is. Not just integrity wise, but business wise. No matter what happens, if people get sick or not, they will be able to say, “Hey, we did everything we could to prevent this. And we were transparent from the outset.” Get ahead of your negative press and you will own your press. All that said, Listeria is a scary deal. Hopefully this flames out into nothing.
I was beginning to wonder when the next major brand would be dealt. For a while there it felt like the entire industry was on sale. Huddle House’s move to little-known Elysium Management was intriguing on a couple of levels. The family-dining brand did have its share of struggles a few years back but has done very well with Sentinel backing its growth. In the past six years, average-unit volume is up 14 percent, and the brand is expanding. Huddle House signed 36 new franchise agreements in fiscal 2017—its biggest spurt in 15 years. As always with this kind of move, we end up wondering what’s next? There are a lot of resources, from a remodel to these new agreements, poured into Huddle House. I’d expect much of the same moving forward, although, of course, it will be interesting to track.
Some recent data showed that a whopping 37 percent of customers are still concerned about the brand’s food-safety woes. That’s somewhat alarming. I’m left asking myself, is it really more dangerous to eat at Chipotle than anywhere else? Probably not at this point. But the chain just can’t shake that image. Being a public brand, every report triggers reaction, up or down (seems to be mostly down lately). I do wonder if a private-equity firm with deep pockets took Chipotle private how it would impact the perception, especially, say, five years from now. In that case, the daily reports from Wall Street analysts would likely stop and the chain’s in-house team could start promoting its own news. Not sure this will happen, but it’s an interesting concept.
Our associate editor, Laura Zolman Kirk, is a resident Kentuckian. For this piece, she recapped her best-of-the-best in the Bluegrass state. Better Mediterranean than Egypt? Time to believe it.
The 90-unit pizza chain out of San Antonio, Texas, has major growth goals: 1,000 restaurants in 10 years. To get there, the company felt it was important to switch out its logo, color scheme, and more as it prepares for national saturation. “In order to stay attuned to the ever-changing needs and interests of our consumers, we knew the importance of the need to constantly evolve in order to stay ahead of the competition. As any successful brand does, we are modernizing our logo to reflect the modern and vibrant era we live in,” the company said.
