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As food delivery becomes synonymous with the restaurant experience — data from McKinsey and Company shows that the value of the food delivery industry has more than tripled since 2017 — the need for guardrails around the still-budding segment of the restaurant industry has grown.
The amount of both regional legislation and individual litigation attempting to regulate and mitigate issues with the food delivery industry has escalated recently. Over the past two months alone, Florida passed a bill requiring delivery apps to get permission from restaurants before arranging pickups, a New York City councilmember just proposed a bill that would require delivery apps to allow customers to tip before placing orders, and California put forth a bill that would require delivery app providers to provide an itemized breakdown of fees at checkout, including a disclosure of restaurant-facing fees.
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While restaurant operators continue to struggle with both labor costs and employee retention, the foodservice industry may very well have deeper employee-side problems. According to a study of Glassdoor reviews just released from BBADegree.org (an organization that provides resources for prospective business professionals seeking higher education), workers in the restaurant and foodservice industry complain about burnout the most, as compared with other industries.
Chipotle Mexican Grill scored a 97.72 out of 100 on the organization’s burnout rating score, second only to Progressive Insurance as the workplace with the most complaints of burnout, with “stressful” being the most common word used to describe the workplace environment. According to the Glassdoor reviews that mentioned burnout, Starbucks was also in the top 10 companies out of the 550+ companies surveyed. As non-franchised organizations, the reviews of both Starbucks and Chipotle are overwhelmingly from corporate employees.
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Saknas det avsnitt?
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Starbucks and the National Labor Relations Board faced off Tuesday at the U.S. Supreme Court hearing of Starbucks vs. McKinney, which will determine the scope of the National Labor Relations Board’s power in stepping in to resolve labor disputes. Starbucks argued before the Supreme Court against a previous district court order that had ordered the coffee chain to reinstate seven previously fired workers in Memphis, Tenn., who were terminated in 2022 during an attempt to unionize the store.
According to the legal representation for Starbucks, the highest court in the land should reconsider the district court decision in part because the NLRB’s request for a temporary injunction was approved on the grounds of a two-factor test, even though other circuit courts use a more rigorous four-factor test to determine if the injunction will be granted.
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Bankruptcy filings, no matter the industry, are the result of a thousand cuts.
This month has produced filings and rumors of more to come in the pandemic-shaken restaurant industry.
Maitland, Fla.-based Tijuana Flats Restaurants filed for Chapter 11 protection in the Florida Middle District Bankruptcy Court after closing a total of 40 restaurants this year, 11 of them last week.
And, while Tijuana Flats is in the fast-casual segment, North Aurora, Ill.-based Oberweis Dairy filed April 12 for Chapter 11 bankruptcy reorganization at the 43-unit dairy and retail concept.
And Bloomberg reported April 16 that Orlando, Fla.-based Red Lobster, a stalwart in the casual-dining segment, was talking with experts about a possible bankruptcy filing. The company named Jonathan Tibus, known for his restructuring expertise, as CEO in late March.
Senior editor Ron Ruggless helps us make sense of it all.
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Who has power in the restaurant industry? What does power really mean when it relates to one of the largest industries in the country, one that employs more than 12 million Americans this year and will achieve roughly $1 trillion in annual sales?
The answer is always shifting, and Nation’s Restaurant News’ annual Power List has evolved alongside it, recognizing everyone from chief executives to tech entrepreneurs to general managers. This year, though, a clue can be found in the official definition of power: “possession of control, authority, or influence over others,” according to Merriam-Webster.
Influence. With influence comes power, and increasingly a horde of social-media users are gaining power by capturing consumers’ attention and driving their purchasing decisions.
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Last week, we talked about the tech takeaways from the Restaurant Leadership Conference. Today, executive editor Alicia Kelso is joining us to talk about her takeaways.
The main takeaway is labor. There was a lot of discussion about labor and wages against the backdrop of California’s AB1228 which went into effect earlier this month, raising the minimum wage to $20 an hour. One operator told Alicia he’ll “never” expand in California again, while another felt confident about the combined pricing and technology strategies her team has put into place to soften the inflationary blow. We’ve seen plenty of stories so far about layoffs and kiosk implementations and even menu adjustments to navigate these higher wages, but time will tell how it ultimately shakes out. Will this $20 watermark trickle beyond QSRs? Likely. Other markets? Maybe. Will California’s restaurant growth stagnate a bit? Perhaps among smaller players, but not likely among the bigger players who have the advantages of scale to absorb the higher costs.
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This week, several editors here at Nation’s Restaurant News attended the Restaurant Leadership Conference or RLC in Arizona. The conference gathers top leadership at restaurant companies for discussions, networking, and sessions.
Senior editor Joanna Fantozzi was there are had some key takeaways from the conference.
First, pricing & labor costs. Something we’ve been talking about in the industry for quite a while ranging from digital menu boards to AI technology that can predict future needs to how to maintain fair pricing while also turning a profit.
Second, experience is still key. At casual dining restaurants, there’s a hesitancy to embrace technology out of fear that it would disrupt the hospitality they’ve become known for. How can they balance both? Also, the rise in the new kind of eatertainment brands was a big theme of the conference.
Third, data is a big tech takeaway. We’ve been talking about data collection here for a while but the question of ‘what do I do with his data?’ is still a mystery for many brands, including the top 25.
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Menu innovation never stops, but at times of rising costs and diminished labor, finding relatively easy ways to create menu news is especially appealing.
It’s operationally straightforward to swap one sauce for another, but quite impactful in terms of flavor.
Sweet-and-spicy was certainly the flavor combination of last year, and Arby’s, Qdoba, Buffalo Wild Wings, Genghis Grill, Red Lobster, Chester’s Chicken, and Bonchon all added sauces in that category. Twin Peaks added a hot sauce that’s so spicy its name requires an asterisk, while other chains augmented what they already had, such as The Halal Guys and Naf Naf Grill.
McDonald’s, while busily upgrading its burgers, also decided to make its beloved Big Mac sauce available for any menu item.
Dunkin’ found that the Butter Pecan Swirl which was a seasonal syrup that guests could add to their coffee was so popular that they made it a permanent addition to the menu.
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Pizza Hut, the division of Yum Brands Inc., is partnering with online influencer Keith Lee for a new benefit pie, the company said Tuesday.
Plano, Texas-based Pizza Hut is teaming with the NAACP Outstanding Social Media Personality winner to support both Lee’s charities as well as promote its “$12 Any” campaign, which allows customers to customize their toppings and crust.
Lee’s community pizza features his family favorite toppings, pepperoni and bacon, on a hand-tossed crust.
Lee is known for his food content pushed to more than 16 million TikTok followers.
As part of this partnership, Pizza Hut and Lee will donate $50,000 to Southfield ANT and OakHills High School, where Keith and his wife, Ronni, attended high school.
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Starbucks’ newest dual lineup of beverages takes on the “swicy” trend (that’s “sweet and spicy”) that has been popular with younger generations as of late. On April 14 at Coachella, Starbucks unveiled the new Spicy Lemonade Refreshers in three flavors — pineapple, dragonfruit and strawberry — that are spiced with Starbucks’ proprietary chili powder blend.
These drinks, available at all Starbucks cafes for a limited time starting April 16, join the lineup of “swicy” drinks made with hot honey that were announced last month for Reserve stores in Chicago, New York City, and Seattle. Together, these beverages join the throng of hot honey pepperoni pizzas, sweet chili-flavored Takis, and chili pepper maple syrups that have been popular on menus and in grocery stores over the past year.
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Growing taco concept Velvet Taco has big plans for the next few years. Recently, Alicia Kelso went to the chain’s Dallas headquarters to tour the place and, more importantly, try the tacos.
While other brands have simplified and paired down menus, Velvet Taco has become known for expanding its menu. From the brand’s signature tacos like the Chicken Tikka to its weekly taco features, called WTF, the brand is leaning into the fun part of the restaurant industry.
CEO Clay Dover, who has worked at Pei Wei and Raising Cane’s as chief marketing officer, has promised that the chain will be growing soon and has 200 restaurants in the pipeline. Some of those new locations include airports as well as international expansion.
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Teens continue to love Chick-fil-A and, as demonstrated by the chain’s recently reported 2023 AUVs — up almost 10% over 2022 — they’re not alone. The semi-annual Piper Sandler survey “Taking Stock with Teens” identified the top five restaurant chains favored by today’s teens, and the results are somewhat surprising.
In addition to Chick-fil-A, which received 16% of the vote, other top choices include McDonald’s (10%), Chipotle (9%), Raising Cane’s (4%), and Texas Roadhouse (4%).
The survey polled 6,020 teens with an average age of 16.1 from 47 states. Of the teens, 38% are employed part-time, and their average household income is $66,280.
Chick-fil-A is a favorite among consumers, and as the chicken segment has been on the rise, the chain has benefited from its success while maintaining its signature service. Last week, Technomic released its report on Chick-fil-A’s 2023 financials, which were up 43% over the chain’s 2018 numbers.
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As Panera Bread is in the midst of a major brand transformation, traffic for the St. Louis-based company is up 5.2% year-over-year, according to recent data from Placer.AI — it’s biggest traffic growth spurt in almost a year, since a 10.8% jump last March.
While Panera originally made its mark by offering freshly baked bread and other bakery goods — and later on, used ethical sourcing and “clean” ingredients as an industry differentiator – the fast-casual brand has recently changed its outlook.
As Panera looks to “get back to its roots” ahead of a near-future IPO, the company recently introduced a menu transformation, while allegedly simultaneously axing about 19% of the menu, including flatbreads, grain bowls, select pastry items and cold brews, and more. Additionally, the company has quietly rolled back some of its ethical sourcing practices to allow for “judicious use of antibiotics” and ease supply chain pressures. At the same time, Panera is still grappling with several lawsuits surrounding Panera customers that died allegedly after consuming highly caffeinated lemonade energy drinks.
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Texas Roadhouse has been on a roll for the past several years now, churning out record sales and average unit volumes and managing astonishingly high demand as it enters its 12th consecutive year of traffic gains.
Such momentum hasn’t necessarily been the case for many of its casual dining peers in a challenging post-pandemic environment. Many have experienced declining traffic patterns and, in some cases, unit count retrenchment. This divergence pushed Texas Roadhouse past one of its biggest segment competitors in 2023, as the Louisville, Ky.-based chain generated higher sales than Applebee’s for the first time, according to new data from Technomic Ignite.
Texas Roadhouse also snuck up on casual dining leader Olive Garden, though it’s worth mentioning that Olive Garden’s 2023 was certainly remarkable in its own right. The Darden Restaurants’ brand finished 2023 with $5.11 billion in sales, an 8.8% increase over 2022’s $4.69 billion.
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Chick-fil-A generated $21.58 billion in sales in 2023, a 14.7% increase over 2022’s $18.81 billion and over 43% over 2021’s $15 billion. According to new data from Technomic Ignite, the chain has essentially doubled its total sales volume since 2018.
In the process, the company has also continued to gain market share in an intensely competitive QSR chicken category.
As Chick-fil-A’s consistent growth remains a major narrative, it’s worth mentioning that its competition extends far beyond the QSR chicken category. Indeed, Kalinowski Equity Research noted all the way back in 2018 that Chick-fil-A’s biggest competitor is McDonald’s and it’s no wonder why the Golden Arches and seemingly every other QSR concept (and beyond) have since ignited a chicken sandwich war replicating the Atlanta-based chain’s signature product.
Fast forward to now and this competitive set remains just as broad. Chick-fil-A released its latest Franchisee Disclosure Document this week, showing that the chain’s average unit volumes for non-mall locations in 2023 reached a record $9.3 million – an 8.1% increase over the previous record, $8.67 million, reached in 2022.
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The James Beard Foundation on Wednesday announced the nominees for its Restaurant and Chef Awards.
For decades, we knew what we were getting from the awards: Mostly well-established chefs from fine-dining restaurants in major cities. Yes, they were usually white and male, but arguably more importantly they were largely from the same groups of chefs with well-established networks and hardworking publicists. The same nominees put forward by past winners and a cadre of food writers (including myself until the late 2010s) who didn’t change very often appeared on the ballots every year, minus whoever won the previous year. And when the big-name chefs such as Thomas Keller and the late Charlie Trotter won all the awards they could win, the nominations were passed on to their protégés.
That’s no longer the case.
The Beard Awards were essentially canceled in 2020 and 2021 for obvious reasons, and in the interim the foundation did some serious soul-searching and reworked the criteria of the awards. Now those nominating potential winners must explain how the chefs, restaurants, bartenders, etc., fit into the foundation’s values “centered around creating a more equitable, sustainable, and healthy work culture.”
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In light of California’s new $20 minimum wage bill for fast-food workers, which went into effect on April 1, restaurant chains and franchisees are already taking action, in some cases by raising prices by as much as 7-8% for select menu items in the state.
Analysts Eric Gonzalez of Keybanc and Mark Kalinowski scraped data and researched pricing trends over the past couple of months at major restaurant chains to determine how much menu prices have been impacted by surge in labor costs in the state. All eyes are on companies like Chipotle and Starbucks especially, as these brands do not franchise (which is historically an industry anomaly).
According to Kalinowski’s research (which sampled 25 Chipotle restaurants in California), the price of a Chipotle chicken burrito went up 8.3% from February to April, while the cost of a steak burrito increased by 7%. This research is in line with Gonzalez’s analysis, which suggests that pricing at most Chipotle’s 476 stores in California increased by 7-8%. Gonzalez said that Chipotle is actually an unusual case because the company has undervalued its menu prices in the state to compete with the proliferation of other burrito options in California.
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ASAP, the food delivery service formerly known as Waitr, has shut down after the company filed for Ch. 7 bankruptcy, according to an 8-K form filed with the U.S. Securities and Exchange Commission on April 2.
Waitr was founded in 2013 as a boutique delivery platform by students at McNeese University and then was officially launched in 2015 before spreading throughout Louisiana and into other regions. In 2018, the company was acquired by Landry’s owner Tilman Fertitta’s blank check company, Landcadia Holdings Inc., for $308 million.
Since then, the company has experienced a series of financial ups and downs as the restaurant industry entered the golden era of food delivery and it was “sink or swim” in the increasingly crowded market. Waitr tried to differentiate itself from competitors like Grubhub and DoorDash by catering toward smaller, independent restaurants in mid-sized cities.
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Earlier this month, McDonald’s experienced a systemwide tech outage in several of the company’s global markets, including Australia, the United Kingdom, Japan and Hong Kong. Although the company clarified that the IT outage was not a result of a cybersecurity threat, it took much of the day to fix and get mobile ordering and kiosks back online.
Then, a couple of weeks later, on March 24, Panera Bread also experienced a “massive tech outage” that impacted online ordering, POS systems, and in-store kiosks, as first reported by Silicon Valley Daily, though the company was not as forthcoming as McDonald’s had been about the cause, and Reddit users in the Panera community speculated that it could be a cyberattack of some kind.
Although few details were revealed about either the McDonald’s or Panera outages, the reality is that widespread IT outage can affect operators of any size, and restaurants need to deploy resources from preventing (as much as they can) these issues from happening in the first place.
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This year, for the annual Women’s Foodservice Forum Conference, our editors Alicia Kelso, Joanna Fantozzi, and Leigh Anne Zinsmeister traveled out to the Hilton Anatole in Dallas, Texas to meet with the 3,000 attendees at the conference honoring women in the restaurant industry. On the 35th anniversary of the conference, change held a new meaning for conference leaders.
There were keynotes from Luvvie Ajayi Jones, Katty Kay, Cassandra Worthy, and Kendra Scott, as well as networking activities.
At the conference, there were sessions on inclusion, overcoming imposter syndrome, personal branding, boundary setting, communication, and sessions for communities of interest like women of color, LGBTQ, single/working parents.
Ahead, you’ll hear from one of the editors from NRN who attended the conference, Joanna Fantozzi, about her impression of attending for the first time as well as hear what her thoughts are on moving the needle forward for DEI and gender parity at a time when companies are rolling them back or changing language.
- Visa fler