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| Yum! Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations due to weaker growth across its top chains, including Taco Bell, KFC and Pizza Hut, noting reduced consumer spending amid the Israel-Hamas conflict. In the U.S., inflation-conscious consumers are cutting costs, so the company plans to boost sales with initiatives like KFC's loyalty program and Taco Bell's frequent product launches. Despite these challenges, Yum! remains committed to its long-term targets for 2024, including core operating profit growth of at least 8%. |
| Yum China has surpassed Q4 sales estimates with a 4% increase in comparable sales, driven by discounts amid China’s economic slowdown. Revenue from KFC rose 18% to $1.87 billion, while Pizza Hut surged 23% to $496 million. Yum China’s stock soared up to 17% in U.S. trading and 28% in Hong Kong. Yum China is aiming for a 20,000-store network by 2026, with plans to open 1,500 to 1,700 outlets in 2024. |
| KFC U.S. has launched its KFC Rewards program, offering customers points for orders via the app or website, with 10 points per dollar spent. Points can be redeemed for free rewards from the Secret Recipe Vault, and members get personalized offers and challenges for more points. CMO Nick Chavez emphasized the program’s aim to delight loyal customers. “KFC Rewards is filled with free food and finger lickin’ good deals for our fried chicken faithful,” Chavez said in a release. “Through our new loyalty program, we will serve even more joy to our guests with incentives and special experiences that are only for our rewards members.” |
| Pizza Hut U.S. has announced its “Goodbye Pies” campaign, offering customers free delivery of a Hot Honey pizza to an ex-lover’s address until Valentine’s Day. The initiative allows for personalized messages on the delivery box and aims to tap into the trend of ending relationships before February 14, backed by YouGov polling. This campaign coincides with Pizza Hut’s release of new menu items featuring a Hot Honey flavor profile. |
| Spreading good fortune this Lunar New Year! |
According to the Chinese zodiac, 2024 is the Year of the Dragon, which symbolizes strength, good luck and power! Check out how the KFC and Pizza Hut APAC markets are putting their best foot forward in 2024 and celebrating with creative ads showing their Lunar New Year spirit. |  | (For Yum! Eyes Only) |
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| McDonald’s has achieved its goal of serving only cage-free eggs ahead of schedule, a commitment made in 2015 for completion by 2025. Partnering with Cargill and egg producers, McDonald’s transformed its supply chain with support from animal welfare experts and academics. Other restaurant brands like Denny’s and Bob Evans have similar goals, reflecting an industry-wide shift towards cage-free egg sourcing. |
| McDonald’s CEO Chris Kempczinski announced aggressive investments in digital and technology during the Q4 2023 earnings call, unveiling three technology platforms to enhance customer experience, franchise operations and core systems. Partnering with Google Cloud and Accenture, the company aims to integrate AI-infused analytics and distributed cloud servers across thousands of restaurants. With a focus on tech as part of the “Accelerating the Arches” growth strategy, McDonald’s plans to add 50,000 restaurants by 2027 while enhancing digital capabilities and workforce training in AI and data. |
| Chipotle’s CEO Brian Niccol highlighted his plans to double the company’s locations to 7,000, citing it as a conservative yet feasible long-term goal. Despite a challenging business environment, Chipotle reported $2.52 billion in revenue, surpassing analyst expectations, with foot traffic up 7.4%. Niccol attributed the success to the company’s focus on quality food and efficient service. While inflation persists, Niccol noted that he believes customers perceive their prices as affordable due to the value proposition of quality and customization. |
| RRG, a 17-unit Popeyes franchisee in Georgia, filed for Chapter 11 bankruptcy, intending to restructure while closing underperforming locations. It’s among the first multi-unit franchisees to file in 2024, indicative of ongoing industry challenges. Three failing restaurants drove RRG into bankruptcy, exacerbating lease arrearages. The company owes between $1 million and $10 million to 100-199 creditors, including significant lease rent and inventory debts. |
| Popeyes has released its inaugural Super Bowl commercial featuring comedian Ken Jeong experiencing their new Wings for the first time after being cryogenically frozen for 52 years. Directed by Calmatic and created in collaboration with McKinney, the ad showcases Popeyes’ new flavors alongside futuristic elements like drones and driverless cars. President Sami Siddiqui emphasizes the fitting pairing of football and wings. |
| The National Restaurant Association forecasts record-high U.S. restaurant sales of $1.1 trillion in 2024, a 10.3% increase from the previous year. Despite this, profitability faces challenges due to surging food and labor costs. The State of the Industry Report highlighted tempered optimism among operators, with 33% expecting sales growth while 45% anticipate flat sales. Rising food and wage expenses pose margin protection challenges. |
| The restaurant industry is projected to add approximately 1.1 million jobs between 2023 and 2032, according to the National Restaurant Association’s projections. Despite this growth, staffing remains a significant challenge, with 45% of surveyed operators reporting insufficient staffing to meet demand. About a quarter of operators are considering utilizing gig workers to supplement their existing staff. While still in its early stages, gig work in the restaurant industry may expand due to factors like flexible hours and technological advancements enabling third-party services to provide temporary workers. However, the classification of gig workers as independent contractors has sparked political conflicts and regulatory scrutiny. |
| Sweetgreen has introduced its first-ever steak option, Caramelized Garlic Steak, in 22 Boston locations, available from February 6. Crafted by a Michelin-trained chef, the grass-fed tri-tip sirloin steak is complemented by slow-roasted caramelized garlic and onions. The launch follows Sweetgreen’s switch to extra virgin olive oil and avocado oil. |
| Applebee’s has responded to backlash over sold-out Date Night Passes by offering 1,000 additional passes through a random drawing. Fans can register until Feb. 9 for a chance to purchase, with winners notified on Valentine’s Day. Originally announced on Jan. 17, the $200 pass offers 52 date nights until Jan. 31, 2025, with up to $30 per use on food and drinks. |
| Mary Kay Henry, president of the Service Employees International Union (SEIU), will step down in May after leading the union since 2010. Under her leadership, the SEIU pushed for a $15 minimum wage, resulting in wage increases for millions of workers across states and cities. The union also fought restaurant employers on wage-setting models and tip credit issues. |
| AB 1228 in California will raise the minimum wage for quick-service employees with 60-plus units to $20 an hour in April, causing reactions from restaurants. While it could lead to price hikes, it may also aid in recruitment and morale. Pizza Factory expects a 10% price increase, balancing customer affordability. Chains like Starbucks, Chipotle and Jack in the Box are testing automation technology. |
| Shake Shack is facing scrutiny over its claim of using chicken “with no hormones,” deemed confusing by activists as all U.S. chicken is hormone-free by law. The Accountability Board seeks clarity or a risk analysis on the claim, pushing for a shareholder proposal. Shake Shack noted it intends to revise its statement to “no added hormones” but faces criticism for what’s seen as a misleading change without addressing the underlying issue. |
| The National Restaurant Association’s 2024 State of the Industry report highlighted technology as a key concern for operators and consumers alike. While many operators see tech as a competitive advantage, only a small fraction view their current tech as leading-edge. To bridge this gap, a significant portion plan to invest in both consumer-facing and kitchen-facing technology. Preferences for tech adaptation vary by generation, with younger demographics embracing more technology-driven experiences. Additionally, automation is expected to augment rather than replace staff in the industry’s future. |
| Starship Technologies, a leader in autonomous delivery, has secured $90 million in funding co-led by Plural and Iconical, bringing its total raised to $230 million since 2014. With over 6 million completed deliveries using its robots, Starship plans to expand its operations globally, focusing on enhancing its AI, technology and wireless charging infrastructure. |
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