This is from the weekly restaurant finance newsletter The Bottom Line. To get this in your inbox every Monday morning, click here.
Wendy’s last week revealed its upgraded chicken sandwiches, which we tried, and enjoyed, even if the rest of the experience wasn’t quite to our standards. For Wendy’s, it will be part of a broad-based effort to upgrade its menu items.
If that sounds familiar, it’s because it is. We just covered Burger King’s menu upgrades, starting with the Whopper, and an entire ad campaign to boot.
Upgrading quality is never a bad thing—except, that is, when the upgrades go too far and change a well-loved product, but honestly I think that’s obvious. Customers are hyper-conscious about the quality of the menu items at their favorite restaurants, especially these days.
If they visit their restaurants and notice that their favorite sandwich tastes fresher without detracting from what made it special in the first place, they’re more likely to go back.
And when chains back these upgrades with marketing, these upgrades can present opportunities to bring in more customers.
Publicly revealed upgrades with innovative marketing have long worked to build sales, as Domino’s demonstrated about 17 years ago when it reconfigured its pizza recipe. Several chains, like McDonald’s and Chili’s, have discovered that improving the menu quality works.
The industry is competitive. And that means brands have to be constantly looking at improvements. The menu is a great place to start.
This week’s financial news
Sysco blew everybody’s mind this week by announcing a $29 billion deal with Restaurant Depot and we were all over it. The company is making a play for a profitable market. But it may ultimately regret the deal. And independent restaurants really didn’t like it. Oh and we had Technomic’s David Henkes chime in.
McDonald’s announced its new Under $3 Menu, which has a lot of what you’d expect would be on it. Are the prices cheaper? That may depend on how you look at it.
Red Lobster still has a lease problem.
Culver’s FDD came out recently and it’s full of interesting information. So we looked at it.
Wait. People are going to Dave & Buster’s for the food and less for the games?
Starbucks just announced new bonuses, expanded tipping and faster pay.
We took an in-depth look at Burger King and everything it’s done over the past several months. This is a big year for them.
Number of the week
Apparently, rich people don’t visit Culver’s locations as much as middle-income or even poor consumers.
Quote of the week
“The acquisition creates a powerful multichannel foodservice platform, strengthens our financial profile, unlocks synergy while delivering more value, choice and convenience to customers nationwide.” -Sysco CEO Kevin Hourican, to investors and analysts, after announcing the Restaurant Depot deal.
On the blog
I wrote about Sysco-Restaurant Depot twice along with Culver’s. Check out all my blog posts at The Bottom Line.
On the podcasts
On A Deeper Dive I talked with Henkes about Sysco-Restaurant Depot. On The Week in Restaurants we also talked about that, McDonald’s and Red Lobster.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.