More of the same is proving a flawed strategy for restaurant companies trying to navigate a rapidly changing marketplace, as some of this week’s jaw-dropping moments attest. The course redirection by Taco Bell alone should prompt operators to think a minute before hitting the cruise control button.
Here’s what we mean.
1. Taco Bell cuts social media spend
If there’s a brand that’s exploited the opportunities of social media, it’s Taco Bell, the cult favorite of young people who’ve turned their phones into an extension of their arms and minds. That’s why heads were turned by the Tex-Mex leader’s revelation this week that it intends to cut spending on social media and redirect the funds into the old standbys of TV and radio.
"I do love and believe in digital," CMO Marisa Thalberg said at Transformation 2017, a conference presented by the American Association of Advertising Agencies. But "we went down some garden paths with it last year."
“Taco Bell is less sure than it wants to be that its digital efforts are reaching its target audiences,” the website CampaignLive.com said in summarizing Thalberg’s presentation.
However, Thalberg stressed that the chain isn’t abandoning social media. Rather, it’s striving to use it more effectively and efficiently.
2. Nice Wendy, meet your nasty twin
The personification of the industry’s third-largest burger chain used to be a pigtailed sweetheart with a warm, respectful disposition. Who knew she could rumble with the nastiest of internet trolls?
Wendy’s showed a decidedly tart side this week when it responded to the news about McDonald’s pending shift to fresh beef for its Quarter Pounder sandwich line. A hallmark of the smaller chain is its use of only unfrozen ground beef, a distinction trumpeted in Wendy’s current TV ad campaign. So it didn’t take kindly to the buzz McDonald’s stirred with its announcement of a gradual shift to fresher ingredients for the big burgers at most of U.S. restaurants.
“So you’ll still use frozen beef in MOST of your burgers in ALL of your restaurants?,” @Wendys tweeted to @McDonalds. “Asking for a friend.”
Other Twitter-ites noticed and asked if the home of the red-head was going for blood.
“We didn't come to play, we came to win,” @Wendys replied.
“We'll stick to our fresh beef. They can have those ice chips they're serving,” it added.
The barrage prompted one observer to tweet, “Wendy’s twitter on fire.”
Meanwhile, Wendy’s continues to run ads that make fun of its competitors for using frozen patties that could just as well serve as doorstops.
3. A target on Chili’s?
The ink was still drying on JAB Holding’s agreement to buy Panera Bread when the speculation began in earnest about what restaurant company may be the next multibillion-dollar acquisition. A consensus is emerging that three operations once thought to be too big to purchase may indeed be having their tires kicked as you read this.
The evidence doesn’t exactly drive up the odds. One stock handicapper noted that Brinker cancelled a scheduled conference appearance in January and took that as a sign some courtship may be underway. Others noted the trio of possibilities have seen their values diminish because of some sales difficulties. But not one of the theorists could cite hard proof, and public companies as a matter of course never comment on acquisition rumors.
4. Changes brewing across the pond
As the globe continues to shrink, U.S. restaurateurs could see some startling challenges to the status quo arrive via transatlantic flight. This week, for instance, two potential solutions to worldwide business problems were floated in the United Kingdom, with no quarantine to keep them on that side of the Atlantic.
Like the U.S., the U.K. is trying to ease the environmental strain of unnecessary waste, and that’s drawn the attention of government and researchers to the restaurant industry. They recently collaborated on an exploration of ways to discourage coffee and tea drinkers’ reliance on single-use cups from establishments like Starbucks.
In a Doh! moment, researchers tested a theory that charging a penalty for one-and-done containers would drive consumers to reusable vessels for their morning eye-opener or teatime pick-me-up. Permanent-ware cups were provided free of charge, and the environmental benefits were pointed out to patrons.
As a result, nearly one in five patrons opted for the reusable cups, an increase of about 12.5%.
The results are now being studied by a government task force.
Meanwhile, British restaurant companies employing more than 250 people will be required within a year to reveal any gap between what they pay men and women for comparable work. The information has to be stated in a variety of ways, not because it’s illegal to have a discrepancy, but as a way of shaming companies that haven’t voluntarily equalized pay.