This space usually ticks down the flashbulb-like developments that whip heads around in the prior seven days. But sometimes a turn of the noggin is weeks or months in the making because the pull on attention mounts so gradually. Consider the bean-spinning shifts that were evident this week after building for much of the past year.
1. Once a paradise, the international market now looks hellish
It’s routine now for McDonald’s to report sales declines for domestic restaurants. But this week the truly global brand posted drops for what was once its Eden. Comp sales fell 2 percent in Europe and 4 percent everywhere else outside of the United States, including Asia, once the land of wide-open promise.
Yum! Brands, the parent of KFC, Pizza Hut and Taco Bell, said same-store sales for its brands fell 15 percent in China last month. Recovering lost ground there is the company’s top priority, CEO David Novak told investors yesterday.
The two mega-franchisors have been stung by a food-safety scandal that erupted in China, but that’s not the only problem U.S. chains are facing overseas. Outback Steakhouse is closing all 34 of its stores in South Korea, the chain’s second-largest market next to the United States, because of blistering competition, soft sales and rampant discounting. Dunkin’ Donuts has acknowledged trouble there as well, and indicated that it may have opened too many stores.
The domestic market, despite all of its problems, is suddenly looking better. Or at least not any harder.
2. Remember Twitter?
The restaurant industry, once a laggard adapter of social media, is now claiming the vanguard.
However slow the business might have been to embrace platforms like Facebook and Twitter, it warmed immediately to Pinterest and Instagram, the photo sharing services that seemed to fit the highly visual orientation of the restaurant trade. Posting snaps of plate presentations and high-craft cocktails came a lot easier to the business, particularly at the high end, than meting out communications with customers in 140-character installments.
This week brought an announcement from Facebook, the owner of Instagram, that the platform has passed Twitter in enrolled users. With 100 million parties signing up since March, the service now claims 300 million members, compared with Twitter’s 284 million.
Restaurants were also likely heartened by news that Instagram plans to verify accounts. No longer can some yahoo claim to be the official representative of a chain or independent.
3. Giants have fallen
McDonald’s posted its sharpest sales decline this week in 14 years. Red Lobster has been dumped by the corporation that once shared its name. Darden Restaurants, the company that Red Lobster Inc. became, is going through what’d be known in former Soviet bloc nations as a reorientation.
To say those operations were once dominant doesn’t adequately describe the lead they enjoyed over most contenders in their competitive sets. If anyone doubts there’s a changing of the guard underway in the business, just look at how several of the one-time superpowers of the industry are limping.
4. Reality catches up with the gluten-free craze
If you saw as many industry forecasts for 2015 as we do, you’d sell your restaurants tomorrow and get into the crystal-ball business. The prognostications are all over the place, but rare was the prediction that restaurants will lard more gluten-free options into menus because customers are clamoring for them.
Still, it’s not as if the demand for wheat-free options is pulling an Atkins Diet exit and disappearing overnight. New gluten-free pizzas figured into the menu that California Pizza Kitchen introduced in Florida this week.
5. Drones won’t deliver meals in-house
Domino’s and Amazon may be tinkering with the use of drones as delivery vehicles, but it’s doubtful the remote-controlled gizmos will catch on as a way of getting meals to customers inside of restaurants.
The proof: T.G.I. Friday’s Mistletoe Drone, which is intended to do nothing more than fly over couples within the restaurant, dangling mistletoe above their heads. Smooching can earn the pair a freebie.
Unfortunately, it can also put them in risk of injury. This week a woman in New York City claimed the tip of her nose was clipped when the drone crashed while landing on her. Friday’s told the local media that it was the lone incident of a remote-controlled, rotary-powered device hitting anyone as it flew through a bustling restaurant where people are constantly walking about.
Who’d have guessed such a think can happen?