Nation's Restaurant News On the Go #109
Nation's Restaurant News
The #1 source of news and business intelligence for restaurant and foodservice industry professionals
I’m Ron Ruggless, senior editor with Nation’s Restaurant News.
This week provided one of the highlights of my year, one in which I share judging duties with members of the Texas Restaurant Association Foundation to evaluate high school ProStart students. (My colleagues were Heather Pickett, Texas Restaurant Foundation executive director, and David Cole, chair of the foundation from iFratelli Pizza.)
They provide delicious nibbles at the annual Food in Fashion event, which features couture creations from dress designers and restaurant brands like Velvet Taco, Asian Mint, and others.
The catch: 35% of each design has to be products from the foodservice industry. It provides some interesting looks.
This year, the local Cindi’s New York Deli chain te4amed with designer Danny Nguyen Couture for a lovely, bagel-throwing entry. The looks are phenomenal. The food by the students is also extraordinary. North Forney High School won this year’s Ben E. Keith Competition Cup for delicious pre-fashion show delights.
Also in this week’s news:
How Dine Brands created an Applebee’s/IHOP mashup menu
Dine Brands’ new dual-branded IHOP/Applebee’s restaurant in Seguin, Texas, has a lot of features that excite the company’s executives. Think labor efficiencies, complementary not competing dayparts, and the opportunity for franchisees to diversify their portfolios.
Chief executive officer John Peyton also likes the restaurant’s unique and exclusive menu items – labeled clearly on the menu as “only available here” – that may just nudge someone to check it out. ?
Those items include a Loaded Buffalo Chicken Omelette, with crispy breaded chicken tenders, a four-cheese blend, ranch and buffalo sauce, all topped with more chicken tender pieces, ranch and buffalo sauce. There’s also a Sirloin Steak & Eggs Combo, Berry Balsamic Grilled Chicken Salad, the Ultimate Breakfast Burger, brunch cocktails such as the Good Morning Mimosa, Espresso Martini, Irish Coffee, and more.
The Cheesecake Factory notes strength of Flower Child brand
The Cheesecake Factory Inc., parent to such brands as North Italia and others, saw fourth quarter same-store sales at its fast-casual Flower Child brand increase 11%, which eclipsed sales increases at its other concepts, the company said Wednesday.
Executives at the Calabasas Hills, Calif.-based company, which released earnings for its Dec. 31-ended fourth quarter, said in a call with analysts that while customers may visit casual-dining Cheesecake Factory four or five times a year, patronage of the Flower Child is more frequent.
“Flower Child, being a fast-casual, you have a use case where people could be coming very frequently,” David Gordon, Cheesecake Factory president, said.
That could be a few times a week, he added, and the use is different, with Flower Child primarily for lunch and Cheesecake Factory for dinner. The Flower Child daypart split is about 65% lunch and 35% dinner, and the concept has about 55% off-premises sales, higher than at the company’s other concepts.
Starbucks launches compostable cups in 14 states, sparking debate
Starbucks is receiving backlash online for rolling out new compostable hot and cold cups to cafes in select stores across 14 states. The opaque-flat-top cups are getting criticized for multiple reasons by baristas and customers online, who claim that the cups are flimsy, hard to drink out of without spilling and ruin the aesthetic for a social media photo.
Starbucks confirmed with Nation’s Restaurant News that these cups are not being rolled out nationally and instead have only been introduced in select stores across 14 states to comply with local mandates that ban or limit single-use plastics. The states include Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, South Carolina, Virginia,? and Washington. While Starbucks is working on a hyper-localized level to comply with city or county mandates, some of these states have passed plastics restrictions. California, for example, is requiring that all single-use plastics be recyclable or compostable by 2032, and the State of Washington now restricts foodservice businesses from automatically providing single-use food service ware.
Texas Roadhouse’s revenue grew to nearly $5.4 billion in 2024
Texas Roadhouse capped off a strong 2024 with revenue growing to nearly $5.4 billion and average unit volumes exceeding $8 million for the first time in the company’s history. For context, the company ended 2023 with $4.78 billion in sales.
Additionally, Texas Roadhouse’s fourth quarter 2024 included positive same-store sales and traffic, as well as a bump in restaurant margins. The brand, which has outpaced the broader industry for several years now, reported a 7.7% increase in same-store sales at company restaurants and 6.3% increase at franchise restaurants. Of that 7.7%, 4.9% was traffic, marking positive gains on that metric for at least 11 years in a row at the chain.
Meanwhile, weekly sales at company restaurants were $153,867, of which $20,067 were to-go sales, versus $141,653 last year, of which $17,793?were to-go sales.
“We continue to see great demand on the to-go side and an increase in occurrences, which are up 13% year-over-year,” head of investor relations Michael Bailen said during the company’s earnings call Thursday. “This continues to be something the guest appreciates, and our operators have gotten better on executing on the to-go business.”
Shake Shack’s same-store sales up 4.3% with price increases
Shake Shack balanced traffic challenges during the fourth quarter of 2024 with increased menu prices. For the fourth quarter ended Dec. 25, the New York City-based fast-casual burger chain reported 14.8% revenue growth, driven by 4.3% same-store sales.
In 2024, the company saw 3.6% same-store sales growth overall despite nearly flat traffic trends in the face of macroeconomic headwinds. These positive numbers were largely boosted by store development growth and increased menu prices over the quarter. Shake Shack chief financial officer Katie Fogerty said during Thursday’s earnings call that the company increased pricing by 4.5% during the fourth quarter to address “delivery cost headwinds.” In March, the company plans to roll some of that back and end the first quarter 2025 with 3% overall price increases.
Moving into 2025, Shake Shack outlined six new strategic priorities on its journey to operating 1,500 Shake Shacks across the United States (more than four times the brand’s current size). The first priority is people, and Shake Shack CEO Rob Lynch outlined two programs to increase internal promotions by 10% in 2025: Shift Up (an intensive development program for “high-performing hourly employees”) and Lead to Succeed (an intensive training program for new managers).
Dutch Bros’ torrid pace, McDonald’s bumpy road, low-income consumers tighten belts
On this week’s Extra Serving, NRN editor in chief Sam Oches and executive editor Alicia Kelso discuss recent earnings reports from major restaurant companies, results of which have so far been a mixed bag.
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1 周As someone who has been professionally involved in education almost as much as I've been involved in publishing, the ProStart program is the type of educational opportunity our students need. What better way to discover or cultivate a passion that can lead to a rewarding career!