Hmm. It seems head scratchers have largely bumped head spinners from the week’s list of attention-grabbing moments. Given the mystifying developments that arose, you’d have thought restaurants were holding their own Agatha Christie Week.
Enlist your inner Sherlock in sleuthing out the answers to these puzzlers.
1. What is Texas Roadhouse doing?
Texas Roadhouse is arguably the strongest concept in casual dining, a moneymaker that’s all but mutant in its ability to boost sales amid what competitors have euphemized as “headwinds.” Given the traffic numbers posted by most sit-down chains, “meltdown” is a more accurate tag.
Why, then, is Roadhouse fiddling with another concept in light of what it disclosed last week?
President Scott Colosi acknowledged that the company isn’t overjoyed with the performance of its Bubba’s 33 spinoff, which now extends to 20 locations. “There's a quarter of them where we're a little disappointed, quite frankly, in where we are today,” he told investors. “Some of it we think is self-inflicted,” the result of manager turnover and some operational misfires.
The biggest issue, Colosi indicated, is the physical plant—“everything from how big we want it to be, to how big physically the building [should be], how much equipment, how big the parking lot, all those kinds of things.”
He revealed that Roadhouse founder Kent Taylor has put together a team to look at 75 variables “to get us a lower development cost overall.”
2. What business is Starbucks in?
Keeping track of the coffee giant’s secondary endeavors is like watching a Ping-Pong match; a viewer’s head never stops spinning from side to side. Recently, for instance, it disclosed an unexpected decision to sell the Tazo tea brand. Before the gasps had died down, the company made a little-noticed second announcement, this time about entering a field completely alien to most restaurant concerns. An enterprise that professes to be all about coffee is poking a stirrer into the credit-card business.
Starbucks has teamed up with Chase to offer a co-branded Visa card sometime this winter, “enabling customers to receive Starbucks Rewards with their purchases both in and out of Starbucks stores,” said CEO Kevin Johnson.
He added that a Visa card preloaded with credits will follow.
“Both products will afford options, a very rich rewards proposition for people who spend on credit, and the unique product rewards for customers who prefer debit,” Johnson said.
3. How are sporting events bad?
One of the exterior factors that had casual chains yelping this summer was the much-hyped pay-per-view fight between boxer Floyd Mayweather and mixed martial arts champ Conor McGregor. The fee for broadcasting the match was too steep for most casual concepts to swallow, so they couldn’t feature it on their own flat-screens. Meanwhile, many customers opted to see the fight in theaters or at home, which kept patrons out of restaurants on a midsummer Saturday.
But the Wingstop takeout wings chain isn’t sure why its pricier competitors were griping. It saw business increase appreciably during the Aug. 26 bout. Management cited the impact as a factor in the chain’s 4.1% same-store sales rise for the third quarter, and contend that the sales benefit offset the severely negative impact of Hurricane Harvey, which struck Texas the next day.
CEO Charlie Morrison said his charge also hasn’t experienced any drop in sales from a decline in viewership of televised NFL games, a dynamic that Papa John’s has loudly blamed for its recent slowdown.
If there was any other impact from sports, Morrison said, it was an updraft in sales in Houston and Los Angeles, whose baseball teams scratched their way into the World Series.
4. Are separate tablets really needed for delivery orders?
Wingstop’s Morrison solved that one in his company’s quarterly conference call with financial analysts. As he explained to them, the chicken chain is pushing into delivery with a tech setup that feeds orders from DoorDash directly into Wingstop’s POS.
“There’s no secondary device on the counter in the restaurant, and it’s a fully integrated solution,” Morrison said. “So another good reason why we like the choice there.”
His testament is further evidence that the back of a restaurant’s counter will no longer have to look like the iPad section of an Apple Store if the place wants to branch into delivery.
5. What will the Potbelly of tomorrow be like?
We’ll have to wait until the day after—actually, sometime in 2018—to find out, but the revamp has started, said acting Potbelly CEO and CFO Michael Coyne.
“We are in the process of designing a shop that will modernize and streamline the customer experience and convenience through the use of technology while highlighting our brand differentiation,” he told the investment community. “Critical to this process is finding ways to reduce the cost of the box while maintaining the brand experience.”
Presumably it won’t be just a tweaked version of the current Potbelly. The sandwich shop has encountered some of the gale winds softening sales through much of the industry. Third-quarter comps for company-operated units fell 4.8%, leaving the franchisor with a net loss of $119,000.