Edit

This week’s 10 head-spinning moments: They said what?

I’m circulating a petition to have the Securities and Exchange Commission alter its rules for public restaurant companies.  If executives refuse to provide any information requested by analysts during a public corporation’s quarterly earnings conference, the officials can be tickled until they either give up the data or agree to read all 47 volumes of the Sarbanes Oxley rulebook.

Apparently my proposal was tested this week, the start of the period when most public restaurant companies air financial results for the first quarter and then provide the backstory to the numbers in conference calls with analysts.  Normally, enough inside dirt is provided to bring tears of joy to eavesdropping business journalists. This go-round brought enough revelations and weeping to warrant coverage in Kleenex’s conference call as a material event.

Chipotle, McDonald’s, Domino’s, Yum! Brands and Brinker International shared head-turning information about their recent past and future directions. Here’s a rundown, delivered in small-plate fashion. And remember that it is searchable.

1. Yum’s stealth acquisition

The franchisor of Taco Bell and KFC said it bought a marketing agency in late February to revive the domestic business of Yum’s weakest brand, Pizza Hut. The agency, Collider, calls itself a “marketing lab that helps brands and products connect to culture.” Yum CEO Greg Creed said Collider provided the key consumer insights that made Taco Bell the company’s most powerful engine of growth and an industry over-achiever. Pizza Hut is now headed by Jeff Fox, a former president of Collider.

2. Price spikes in casual dining

An analysis of the pricing in casual dining has convinced Chili’s that it can raise menu prices by 1 percent next quarter and still beat competitors on value.  “We have room,” said Wyman Roberts, CEO of parent Brinker International. Added CFO Tom Edwards, “The industry has priced up more aggressively than we have over the last six months especially.

3. More precise check splits

Tweaks in Chili’s tabletop technology will enable parties to split the cost of orders right down to who had what item and therefore exactly what they owe.  The capability will allow some patrons at the table to pay for their portion of the check with American Express reward points.

4. Staggering simplicity

A Chipotle Mexican Grill has to stock just 68 ingredients to prepare everything on its menu. A competitor needs 85 items for just one type of burrito, sniffed Chief Creative and Development Officer Mark Crumpacker.

5. Dead-end jobs? Really? 

Last year alone, Chipotle promoted 10,500 employees who started as hourly crewmembers into management positions, said co-CEO Monty Moran.

6. Throughput success

A typical Chipotle restaurant increased its volume by 21 orders per day during the first quarter, according to Moran.  Average unit volumes have hit $2.5 million, a $500,000 increase from three years ago. Chipotle just started a throughput contest, pitting unit against unit, to keep those numbers growing.

7. A price as well as a difference

The burrito chain has seen a sales decline from its rejection of a carnitas supplier that didn’t raise its pigs in accordance with Chipotle’s Food with a Difference credo. Without that source, only about two-thirds of the system can be supplied with the pork, creating a “rolling blackout,” according to CFO Jack Hartung. “We had hoped that the shortage would encourage our carnitas customer to try another menu option and some did, but many have decided to hold out until carnitas returns to their market,” he said. The chain is trying a new way of allocating the limited supplies of the meat until shipments climb back to normal in the fourth quarter.

8. Simplicity is mixed for McDonald’s

Simplifying the burger giant’s menu and operations has been cited as a crucial part of the chain’s turnaround effort to date, but “we have not seen a significant sales uplift from it,” acknowledged CEO Steve Easterbrook. He noted, however, that the effort just began in January and “we have seen it provide us with easing of operational complexity,” a transitional step to focusing more intently on guests and thereby building traffic.

9. What it costs to run a McDonald’s

Executives didn’t reveal aggregate food, labor or occupancy costs, but CFO Kevin Ozan divulged that the annual G&A for a domestic McDonald’s store is “about $45,000 per restaurant.” An international store costs about $45,000 to $50,000, he said.

10. A good problem for Domino’s

The chain’s domestic comp sales gain of 14.5 percent for the first quarter is symptomatic of a problem—yes, you read that right—for the delivery chain. “Our highest-volume stores are getting a little capacity constrained,” explained CEO Patrick Doyle. “Some small percentage of our stores are seeing volumes now that frankly they weren’t built for when they were built 10 or 15 years ago.” But, he added, “that’s the highest-quality problem you will ever face.”

Trending

More from our partners