Oh, to have been blessed this week with a rubber neck! The election was a chiropractor’s boon, but the results weren’t the only skull turners of yelp-worthy proportions. No sooner were beans turned in one direction than a new development spun them the other way.
Here’s why restaurateurs might have ended up a little dizzy.
What happens now with overtime pay?
With new overtime rules bearing down on restaurants, voters may have set up a rescue right out of a Superman flick. On Wednesday morning, even keen-eyed operators might have missed the flicker of speculation that the president-elect would reverse the costly new pay rules. After all, Donald Trump had pledged to undo every “overreaching” executive order that President Obama had issued, and the regs were overhauled as the direct result of a White House directive. Was there hope?
By Thursday, a reversal was posed in the torrent of post-election analysis as a near certainty. The New York Times cited the Department of Labor’s new overtime rules as a prime example of the anti-business/pro-labor measures that Trump would target in his efforts to slash red tape.
Still unanswered is how that might happen, since the calendar greatly complicates the situation. The new rules are scheduled to take effect Dec. 1, and Trump won’t become the president until Jan. 20. Could salaried restaurant managers get the beginnings of a higher pay package, only to have it yanked away when the rules are overturned?
According to the Times, the already-Republican Congress might temper the initial impact of the new rules by legislating a gradual phase-in. Under that scenario, restaurant chains would presumably be loath to increase managers’ salaries to the level that makes them ineligible for overtime when that threshold could be lower or altogether moot in time.
Meanwhile, back to those important issues…
After Tuesday’s historic ballot upset, when the public showed how disregarded it feels, Starbucks turned its attention back to another popular source of anger, frustration and disaffection: its holiday cups.
In case you missed the controversy because of following things like who would be the next leader of the free world, customers have been upset since the coffee giant issued a plain red cup last year as its special year-end drink container. Green is the color of Christmas, right? And what happened to the holiday symbols that adorned previous editions, like snowflakes and reindeer? Was Starbucks shamefully bowing to political correctness?
The controversy took another head-spinning turn, as we reported last week, when the chain issued a green holiday cup this year (“Where’s the Christmas-y red?”), again omitting holiday symbols.
This week, Starbucks aired what it apparently believed would be a brilliant salve: a second holiday edition, this time of red cups that customers had designed. The chain had listened to the people and turned the process over to them.
Instead, more controversy has ensued. Wasn’t green the signature color for Christmas?
“It’s just a cup,” lamented Howard Schultz.
Chipotle makes nice
If skeptics doubt the nation can come together after such a divisive election, they should take inspiration from reports that aired this week about Chipotle’s relations with a notoriously meddlesome shareholder.
Hedge fund manager Bill Ackman revealed this week that relations between him and Chipotle, in which he holds a recently acquired 9.9% stake, are harmonious and constructive. Similar warm and fuzzies were voiced by Chipotle’s CFO, Jack Hartung.
That might have been a surprise to restaurant companies that counted Ackman among their shareholders in the past. He has often pressed the companies to change strategies on such matters as owning their own real estate, or the composition of their boards.
Fireworks were expected when Ackman’s stake in Chipotle was revealed. The fast-casual chain subsequently retained new lawyers, investment advisors and public relations counsels, arming for battle.
Reuters reported last week that Ackman and Chipotle have signed an agreement that they will negotiate in private about the company’s direction, which could explain the partners’ high-profile love fest.
A dish just for UberEats
Astoundingly, scientists picked up signs of life outside the political arena this week. In the restaurant industry, one of the developments worthy of notice was a sign of how delivery is changing operations, right down to the menu.
Umami Burger revealed this week that it’s developed a new sandwich specifically for delivery, and specifically for delivery by UberEats, the adjunct service of the citizen-taxi empire that’s changing how America travels.
The head-turning aspects of the new product are the features that were adopted specifically because of Uber. “We can now deliver items that we were hesitant to before,” the company said. The new burger, for instance, is topped with a sunny-side-up egg, an ingredient that was once viewed as too delicate to trust to a delivery trek.
“The sunny-side-up egg yolk still might break during transport, but we spent a lot of time testing that as well. The yolk is designed to run and mix together with the burger. So even if it does break during transport, the flavors still work, exactly as they were intended.”
Popeyes’ accelerated problem-solving
If Americans should still feel they’re getting a raw deal under the Trump Administration, the White House might want to hire Popeyes as a consultant. The chicken chain revealed results this week of Service Basics 2.0, a program that was recently adopted to fix whatever prompts a customer to complain.
“Previously, only 55% of guest complaints were addressed and it took an average of 12 days,” CEO Cheryl Bachelder told financial analysts. “Now with Service Basics 2.0 in place, more than 89% of guest problems are being resolved, within 48 hours.”
Look for a full account of how the program works in an edition next week of Restaurant Business Daily.