How McDonald’s Easterbrook can maintain momentum

February 4, 2016
Joe Cahill
Crains
January 27, 2016
http://www.chicagobusiness.com/article/20160127/BLOGS10/160129896/how-mcdonalds-easterbrook-can-maintain-momentum

McDonalds-all-day-breakfast-win-for-CEO-Easterbook.jpgAll-day sales of Egg McMuffins did more than reverse a three-year slump at McDonald’s: It has inspired confidence in CEO Steve Easterbrook and buys time for the new chief to lock in the elements of a long-term growth strategy.

Last fall, Easterbrook answered the prayers of many customers who had yearned for years to buy breakfast after McDonald’s long-standing 10:30 a.m. cutoff. This week, McDonald’s credited all-day breakfast for the lion’s share of a 5.7 percent rise in fourth-quarter sales at U.S. locations open more than a year. The quarterly increase, outstripping even the expectations of McDonald’s executives, was the second in a row and a sign that McDonald’s is finally moving in the right direction under Easterbrook, who replaced Don Thompson in March.

A pair of quarterly sales gains doesn’t mean Easterbrook has put McDonald’s on track for long-term sustainable growth. But together with some other recent moves, it shows he understands the challenges facing McDonald’s and will move aggressively to meet them.

If Easterbrook still has a long way to go, all-day breakfast gives him a bit more time to get there. He’ll enjoy a grace period of three more quarters, as extended breakfast hours continue to generate sales increases over periods that predate the change. That cushion will disappear in the fourth quarter, when McDonald’s will lap a quarter with all-day breakfast for the first time. “That will be the telling moment,” says Darren Tristano, president of restaurant consulting firm Technomic in Chicago.

During the next three quarters, Easterbrook must build on the success of all-day breakfast, which is bringing in new customers and others who hadn’t visited McDonald’s in years. Now he needs to turn them into regulars. Strong store traffic is essential to the long-term health of any fast-food chain. Guest counts at McDonald’s declined again for the full year of 2015, but turned upward in the fourth quarter.

Customer traffic will keep rising if Easterbrook gives people more reasons to keep coming back after the novelty of afternoon Egg McMuffins wears off. That requires steady progress in three key areas:

Service. Service slowed as McDonald’s menu grew more complex in recent years. Drive-in speeds lagged those of key rivals. Easterbrook has begun to address the problem by expanding on a menu-decluttering effort launched by Thompson. “Simplifying the process is what people want nowadays, and they’re finally addressing that,” says analyst R.J. Hottovy of Morningstar in Chicago.

On McDonald’s earnings call with Wall Street analysts on Jan. 25, Easterbrook said customer feedback shows improvement in “food quality, order accuracy, speed and friendliness.” But all-day breakfast adds a new layer of complexity, potentially undermining service speed and accuracy.

Ruthless purging of slow-selling items will be essential to keep restaurants running smoothly. Restaurant efficiency also could benefit from new technologies that allow customers to order via kiosks and mobile devices. McDonald’s is testing these systems in the U.S. but hasn’t set a date for national rollout.

Value. McDonald’s is still searching for a successor to the Dollar Menu, the low-price offering that drove its last turnaround, in the mid-to-late 2000s. The company badly needs a compelling deal for budget-conscious customers who faded away during the last recession and its aftermath. Always a bulwark of McDonald’s business, lower-income families matter even more today as affluent consumers migrate to fast-casual chains like Panera. “Value-conscious” consumers now represent about 25 percent of McDonald’s customer base, Easterbrook told analysts on the earnings call.

Early this month, McDonald’s began a six-week test of “McPick2,”which offers two menu items for $2. Easterbrook said initial response has been favorable and acknowledged the need to settle on a permanent value proposition this year.

“Value still has to be at the core of their menu,” Tristano says, noting most of McDonald’s rivals offer a low-price combo. “It’s what a lot of their customers want, and if they can’t get it they’ll go elsewhere.”

Listening. McDonald’s boffo launch of all-day breakfast shows what happens when a company listens to customers. For years, McDonald’s rejected customer pleas to extend breakfast service beyond late morning, citing insurmountable operational hurdles. Easterbrook pulled it off in a matter of months, a clear sign his efforts to winnow bureaucracy and accelerate decision-making based on market feedback are bearing fruit. “That shows the company is much more nimble now than it was before,” Hottovy says.

A streamlined management structure established last summer has “sharpened our focus,” and “removed distractions to speed up decisions and increase our ability to move winning strategies quickly across markets,” Easterbrook told analysts.

Of course, faster product rollouts won’t help if customers don’t like them. McDonald’s has struggled for years to cook up menu innovations that click with consumers. Remember, the Egg McMuffin isn’t a breakthrough innovation but a proven winner that McDonald’s made more available.

Acknowledging that all-day breakfast demand will “settle down” from its initial euphoria, Easterbrook said McDonald’s has more initiatives in the pipeline for 2016. We’ll see if he can come up with a hit new product—the true test of whether McDonald’s has developed an ear for customers’ ever-changing preferences.

“As long as they’re listening to the customer and giving them what they want, instead of trying to force something on the customers, they can be successful,” Tristano says.


Bootler brings comparison shopping to food delivery services

February 3, 2016
Cheryl V. Jackson
Blue Sky Innovation
Chicago Tribune
January 26, 2016
http://www.chicagotribune.com/bluesky/originals/ct-bootler-food-delivery-bsi-20160126-story.html

Food deliveryA Chicago startup plans to feed on the food-delivery boom with a search engine that makes comparing costs and delivery times easier.

Bootler (at gobootler.com) launches Tuesday in Chicago with a platform that allows users to compare menu items, prices, delivery times and fees, and order minimums across a variety of services. Users can add booze to their orders through the company’s partnership with on-demand alcohol delivery service Saucey.

Founder Michael DiBenedetto says customers who use Bootler don’t have to hop from one delivery site to the next to find what they want, then evaluate costs and other information.

The site currently includes Delivery.com, GrubHub, DoorDash, Postmates and EatStreet, with plans to add Uber, Amazon, Caviar and Eat24.

“It’s a very saturated market,” DiBenedetto said.”We think it will work because of how many companies are in the space. We’re driving more awareness and traffic for all the players in the space by arranging them all in one spot.”

Users can search by restaurant or food category then see the total from various delivery services, including menu price, taxes and delivery fees. They can then click through to their preferred service to complete the order.

Using Bootler is free to consumers. The company plans to get a cut of the delivery services’ take.

One-stop shopping for online food and alcohol ordering seems a natural with the growth of restaurant delivery services, said Darren Tristano, president at research and consultant firm Technomic.

“It was only a matter of time before somebody built a site that makes comparisons,” Tristano said. “It makes sense. We’ve seen it in other types of comparative places like with travel, with airfares and hotels and car rentals.”

It could be difficult to get consumers who already order from particular sites to steer first to an aggregator, though, Tristano said.

It “will be interesting to see if they can get consumers for a few dollars’ or a few minutes’ savings,” he said.

DiBenedetto said he started working on the website in June.

“I’ve wanted to order from one restaurant and it didn’t have what I wanted, so you end up having three or four tabs open until you find one that delivers what you want,” he said.

The site began operating beta in December, he said.


This is what happens when McDonald’s listens to its customers

February 2, 2016
By Roberto A. Ferdman
Washington Post
January 25, 2016
https://www.washingtonpost.com/news/wonk/wp/2016/01/25/the-incredible-power-of-the-egg-mcmuffin/
It’s no secret that McDonald’s has been struggling. At a time when specialization is increasingly important in the food business, the brand has opted for breadth, offering everything under the moon: hamburgers, salads, yogurt parfaits and fancy chicken wraps. And it hasn’t worked. In fact, that’s putting it mildly.Each time McDonald’s has announced how much money it’s making, the company has been forced to share an embarrassing truth: Americans are eating less and less of its hamburgers, chicken nuggets and French fries. The routine became so consistently depressing that McDonald’s decided to quit sharing monthly performance data altogether in March.

But all of that seems to be changing: For the first time in a long time, McDonald’s is thrilled to tell everyone how it’s doing.

On Monday, McDonald’s said that same-store sales (those open for at least 13 months) increased by 5.7 percent in the last three months of 2015, more than twice what analysts had expected. The hefty jump is the largest the company has reported in almost four years.

The news comes on the heels of a major concession by the fast-food chain, which is no coincidence. For years, adoring fans pleaded with McDonald’s to extend its breakfast menu beyond the current 10:30 a.m. cutoff. For nearly as long, the fast-food behemoth shrugged off the ask, saying it doesn’t have the capacity to make breakfast and everything else at the same time. But this October, McDonald’s finally gave in, agreeing to offer Egg McMuffins and other breakfast fare from open to close. And the reaction has been overwhelmingly positive.

“All-day breakfast was clearly the primary driver of the quarter,” McDonald’s Chief Executive Officer Steve Easterbrook told investors in a conference call following the company’s earnings announcement. “We knew it would be.”

In some ways, the immediate success of all-day breakfast is a reminder of one of McDonald’s biggest follies: its inability to see itself what for what it is. Rather than embrace what its fans adore it for most — a place that serves hamburgers, French fries, chicken nuggets, and yes, an exceedingly popular breakfast menu — McDonald’s tried to become something other than itself, expanding its menu, largely with salads, wraps and other healthier but also more expensive fare, to mimic new competitors.

The Chipotles and Shake Shacks of the fast-food world have managed to sell pricier food, at least in part, because of their association with meaningful trends in the food world that prioritize good food over cheap food. But it’s a much harder pitch at cheap burger chains, which people visit for a respite from their (hopefully) healthier dietary regimen, rather than a reminder that they could be eating something better. It’s no coincidence that fast-food chain Sonic has flourished by accepting what it is, while McDonald’s has struggled by doing just the opposite.

The chain’s re-energized business can also be seen as a testament to the enduring popularity of the Egg McMuffin, arguably the most iconic breakfast sandwich in the world. The affordable egg sandwich, which was first served in the early 1970s, caught on so quickly that it helped popularize the entire breakfast sandwich category. But it hasn’t been replaced. Today, demand for it is such that the chain buys more than 2 billion eggs per year in the United States alone, or almost 5 percent of all eggs produced in the country.

“It’s one of the oldest items they’ve had on their menu, and it’s still one of the most popular,” said Darren Tristano, who is the president of Technomic, a food industry market research firm. “Selling it all daylong was a no-brainer.”

Since Easterbook became McDonald’s CEO last March, he has shown that he’s willing to not only listen to but also heed requests from the fast-food chain’s customers. The introduction of all-day breakfast is perhaps the best example, but during his short stint, he has already also shortened the McDonald’s menu and announced plans to switch to cage-free eggs and antibiotic-free chicken in the United States, among other things.

Tristano reminds that it’s too early to tell whether the most encouraging earnings in years is a sign of things to come. The real test will be what happens in the rest of 2016, and beyond. The excitement around all-day breakfast, and Egg McMuffins specifically, might not last, which even Easterbrook admitted to investors this morning. But the move has set an important precedent.

“I think listening to the customer is going to the most important rule McDonald’s has to follow,” said Tristano. “As long as they’re doing that, they should be fine, because the customer usually has the answer.”

When markets opened Monday, McDonald’s shares were up 3 percent on the news, but finished the day up less than 1 percent. Despite the company’s recent struggles, its stock is at a near all-time high.


THE GLOBAL RESTAURANT AWARDS ANNOUNCES JUDGING PANEL

February 1, 2016
DUBAI, BRITISH COLUMBIA, UNITED ARAB EMIRATES,
January 25, 2016
EINPresswire.com
http://www.einnews.com/pr_news/308138418/the-global-restaurant-awards-announces-judging-panel

grif-awards-2xThe inaugural Global Restaurant Awards have unveiled the judges that will be evaluating the nominations submitted for the awards. Simon Lazarus, Vice President Food & Beverage, Europe, Middle East & Africa, Hilton Worldwide; Angela Hartnett, Michelin Chef; Ufi Ibrahim, Chief Executive, British Hospitality Association; Aaron Noveshen, President and Founder, The Culinary Edge and Richard Vines, Chief Food Critic, Bloomberg are just some of the experts judging these awards.

Mark Lewis, Managing Director, The Caterer will be chairing the judging panel. These awards mark the first international awards event for The Caterer who operate the leading awards events in hospitality and catering in the UK. Mark commented, “We are thrilled with the support we have received from our international community, our judges have been carefully selected from all different aspects of the global industry from executive Chefs, innovative entrepreneurs, food critics, business leaders and associations all working in our thriving industry”

Award Categories include recognition for Sustainability, Technology, Design, New Concepts, International Growth, Hotel F&B and Marketing Excellence. Darren Tristano, President, Technomic Inc and a member of the awards judging panel commented, “These awards will recognise the innovation, talent and growth our industry has”. Jennifer Pettinger, Managing Director Middle East at Bench Events said, “the Global Restaurant Awards will provide exposure to those operators, franchisors and entrepreneurs that have strived for success in this industry. It will provide a global platform for recognition on a business level.”

The Global Restaurant Awards will take place on 16 March at the prestigious Burj Al Arab, Dubai and is being hosted by the Jumeirah Group. Pascal Aussignac, Executive Chef & Co-Owner, Gascon Connection, will be creating a signature dish for the awards and will also be having a residency with the Jumeirah Group. Robert Swade, Group Chief Operating Officer, Jumeirah Group commented, “We are delighted to be hosting the Global Restaurant Awards and collaborating with Chef Pascal for this prestigious event. Jumeirah proudly champions high quality, innovative concepts and creative cuisine, and we are excited to share our culinary excellence with the industry“.

The awards take place in conjunction with the Global Restaurant Investment Forum (GRIF) 14 – 16 March at The Address Dubai Mall. The forum brings together the global restaurant investment community for a 2-day conference, with topical sessions which discuss global trends, investment opportunities, new concepts, franchising and internationalising. The programme encompasses culinary tours, masterclasses, roundtable discussions and spectacular networking receptions.

Nominations for the awards: http://www.restaurant-invest.com/awards/nominate-a-business and registration for GRIF: http://www.restaurant-invest.com/ are still open

Global Restaurant Awards (http://www.global-restaurant-awards.com)
The Global Restaurant Awards has been developed through partnership with Connecting Travel whose sister business, The Caterer, is responsible for the renowned Cateys awards for UK hospitality. The Global Restaurant Awards will take place during the Global Restaurant Investment Forum (GRIF) and offer an opportunity for industry leaders to come together and celebrate those businesses that have shown innovation, vision and leadership in their concepts and operations. They will recognise the brands that have best engaged with their consumers through social media, technology, design or sustainability.

The Global Restaurant Awards will provide a platform to acknowledge the brands and concepts that have revolutionised the culinary landscape, bringing a new vibrancy to the industry and above all pushing boundaries to achieve perfection.


Consumers pick top restaurant chains

January 28, 2016
635886546846667948-papam.jpg6 a.m. CST January 19, 2016
http://www.argusleader.com/story/news/business-journal/2016/01/19/consumers-pick-top-restaurant-chains/78945800/

Some restaurants with a presence in Sioux Falls were among the winners of the Consumers’ Choice Awards from industry research firm Technomic.

It surveyed consumers about 138 restaurant chains and 60 attributes.

“It’s important to point out that it’s the consumers who rated the chains and selected the winners,” said Darren Tristano, president of Technomic. “In essence, the award is from the customers themselves.”

The winners are:

• Food quality, quick-service category: Papa Murphy’s Take ‘N’ Bake Pizza

• Food quality, fast-casual category: Firehouse Subs

• Food quality, full-service restaurants: Bonefish Grill

• Intent to return, quick-service: In-N-Out Burger

• Intent to return, fast-casual: Rubio’s

• Intent to return, full-service: Cheddar’s Scratch Kitchen

• Provides value through service, quick-service: Chick-fil-A

• Provides value through service, fast-casual: Jimmy John’s Gourmet Sandwiches

• Provides value through service, full-service: Cracker Barrel Old Country Store

• Socially responsible, quick-service: Ben & Jerry’s

• Socially responsible, fast-casual, Chipotle Mexican Grill

• Socially responsible, full-service: Seasons 52


Cracker Barrel Old Country Store® Wins Chain Restaurant Consumers’ Choice Award

January 27, 2016

Nick Flanagan, a senior vice president for restaurant and retail for Cracker Barrel Old Country Stores®, accepts award from Technomic President Darren Tristano. Cracker Barrel was named a Chain Restaurants Consumers' Choice Award winner for 2016. (Photo: Business Wire)LEBANON, Tenn.–(BUSINESS WIRE)–Cracker Barrel Old Country Store® was named Chain Restaurant Consumers’ Choice Awards winner in the full service restaurant category for the value it provides through excellent service, marking the restaurant company’s third win since 2013.

Conducted by Technomic Inc., a leading food industry research company, its fourth annual Chain Restaurant Consumers’ Choice Awards identifies the top chain restaurants by asking nearly 100,000 consumers to rate over 120 leading restaurant chains on 60 different attributes ranging from the quality of food to the overall brand reputation. Cracker Barrel was given top marks on its ability to provide value through high-quality service, according to consumers.

“Consumers give Cracker Barrel credit for its friendly and polite servers,” said Technomic Inc. President Darren Tristano. “When we asked why they gave high ratings for their visit, many of our respondents talked about how they always make people feel at home.”

“Cracker Barrel’s commitment to excellence is driven by our mission of Pleasing People,” said Cracker Barrel Senior Vice President of Restaurant and Retail Operations Nick Flanagan, who accepted the award at Technomic’s Consumer Insights Planning Program Conference in Newport Beach, California on Thursday, Jan. 14.

“We promise guests a friendly, home-away-from-home, where they can relax, enjoy real home-style food and be cared for like family,” he continued. “Since 2013, Cracker Barrel has been voted the top full service restaurant in the Consumers’ Choice Awards’ ‘Pleasant, Friendly Service,’ ‘Food and Beverage,’ and ‘Value Through Service’ categories, which is a testament to our 72,000 employees who bring our mission to life every day.”

About Technomic

Only Technomic, A Winsight Company, delivers a 360-degree view of the food industry. We impact growth and profitability for our clients by providing consumer-grounded vision and channel-relevant strategic insights. Our services range from major research studies and management consulting solutions to online databases and simple fact-finding assignments. Our clients include food manufacturers and distributors, restaurants and retailers, other foodservice organizations, and various institutions aligned with the food industry. Visit us atwww.technomic.com.

About Cracker Barrel Old Country Store, Inc.

Cracker Barrel Old Country Store, Inc. provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that’s surprisingly unique, genuinely fun and reminiscent of America’s country heritage…all at a fair price. Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL) was established in 1969 in Lebanon, Tenn. and operates 635 company-owned locations in 42 states. Nation’s Restaurant News’ 2015 Consumer Picks survey named Cracker Barrel Old Country Store® the winner in two Family-Dining Restaurants categories – Menu Variety and Atmosphere. For more information about the company, visit crackerbarrel.com.


Long John Silver’s plans reboot just in time for Lenten fish fries

January 26, 2016

Christmas comes in February for seafood restaurant chain Long John Silver’s, which is launching a reboot of the iconic brand in 2016.

Pittsburgh is front and center for the new Long John Silver’s because of the region’s large Catholic population, the third largest nationwide, according to CEO James O’Reilly. Lent, the 40-day season of penance and avoiding meat at meals, starts Feb. 10, bringing with it boom sales for the privately held, Louisville, Ky.-based company.

“There will always be ups and downs in the restaurant industry, but it’s all about delivering consistency to customers,” the 49-year-old Mr. O’Reilly said. “The time of Lent for us is what Christmas is to retailers.”

Pittsburgh and the surrounding five counties have between 500,000 and 600,000 Catholics, according to Pittsburgh Catholic editor William Cone. The newspaper is preparing to publish its annual list of parish fish fries Jan. 29 in preparation for the start of Lent.

“It’s probably one of our most popular issues,” Mr. Cone said. “People wait for it all year.”

Mr. O’Reilly was in Monroeville Thursday for a daylong meeting with about 50 operators of its 17 corporately owned stores in the Pittsburgh area and some franchisees from outside the region. He planned to discuss the staffing increases at the restaurants — 300 new jobs are planned — and improvements to stores and parking lots.

One thing that won’t change much is Long John Silver’s menu, which has been criticized in recent years as unhealthy for its fat and sodium content. National Public Radio once called Long John Silver’s food a “heart attack on a hook,” but some meals have since been discontinued, as was the use of trans fats.

Baked fish options have always been available from the chain and one dinner has just 600 calories, Mr. O’Reilly said. What’s more, consumers can build meals with even lower calorie counts.

Having healthier options is key, said Darren Tristano, president of Chicago-based marketing research outfit Technomic Inc. But consumers aren’t thinking of healthy eating when eating out.

“Quite frankly, consumers are looking for fried food,” he said. “Indulgence away from home is what they’re looking for and it’s also often very affordable.”

Mr. O’Reilly, who came to Long John Silver’s in March 2015 from hamburger chain Sonic Corp., takes over the reins at a difficult time as consumers have been shunning traditional fast food in favor of restaurants selling healthier fare. Long John Silver’s, which has about 1,300 stores nationwide, also has had changes in leadership.

Mr. O’Reilly replaced Mike Kern, who served as CEO for three years. Mr. Kern was part of investor group LJS Partners LLC that bought the restaurant chain from Yum! Brands Inc. in 2011. The company was founded in 1969 and did not disclose sales figures or the cost of the store upgrades, which are being carried out nationally as well.

Consumers will continue to seek out Long John Silver’s food, partly because there are few other places that focus on fried fish, said Warren Solochek, president of the food service practice at Port Washington, N.Y.-based NPD Group Inc. New paint, lighting and other planned store improvements aside, the challenge for Mr. O’Reilly will be to keep the restaurant name in the consumer’s mind.

“What are they going to do to be top of mind?” Mr. Solochek said. “And he may have a plan to do that.”


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