First Bite

Texas Roadhouse has been on a roll for the past several years now, churning out record sales and average unit volumes and managing astonishingly high demand as it enters its 12th consecutive year of traffic gains.

Such momentum hasn’t necessarily been the case for many of its casual dining peers in a challenging post-pandemic environment. Many have experienced declining traffic patterns and, in some cases, unit count retrenchment. This divergence pushed Texas Roadhouse past one of its biggest segment competitors in 2023, as the Louisville, Ky.-based chain generated higher sales than Applebee’s for the first time, according to new data from Technomic Ignite.

Texas Roadhouse also snuck up on casual dining leader Olive Garden, though it’s worth mentioning that Olive Garden’s 2023 was certainly remarkable in its own right. The Darden Restaurants’ brand finished 2023 with $5.11 billion in sales, an 8.8% increase over 2022’s $4.69 billion.

Chick-fil-A generated $21.58 billion in sales in 2023, a 14.7% increase over 2022’s $18.81 billion and over 43% over 2021’s $15 billion. According to new data from Technomic Ignite, the chain has essentially doubled its total sales volume since 2018.

In the process, the company has also continued to gain market share in an intensely competitive QSR chicken category. 

As Chick-fil-A’s consistent growth remains a major narrative, it’s worth mentioning that its competition extends far beyond the QSR chicken category. Indeed, Kalinowski Equity Research noted all the way back in 2018 that Chick-fil-A’s biggest competitor is McDonald’s and it’s no wonder why the Golden Arches and seemingly every other QSR concept (and beyond) have since ignited a chicken sandwich war replicating the Atlanta-based chain’s signature product.

Fast forward to now and this competitive set remains just as broad. Chick-fil-A released its latest Franchisee Disclosure Document this week, showing that the chain’s average unit volumes for non-mall locations in 2023 reached a record $9.3 million – an 8.1% increase over the previous record, $8.67 million, reached in 2022.

The James Beard Foundation on Wednesday announced the nominees for its Restaurant and Chef Awards.

For decades, we knew what we were getting from the awards: Mostly well-established chefs from fine-dining restaurants in major cities. Yes, they were usually white and male, but arguably more importantly they were largely from the same groups of chefs with well-established networks and hardworking publicists. The same nominees put forward by past winners and a cadre of food writers (including myself until the late 2010s) who didn’t change very often appeared on the ballots every year, minus whoever won the previous year. And when the big-name chefs such as Thomas Keller and the late Charlie Trotter won all the awards they could win, the nominations were passed on to their protégés. 

That’s no longer the case.

The Beard Awards were essentially canceled in 2020 and 2021 for obvious reasons, and in the interim the foundation did some serious soul-searching and reworked the criteria of the awards. Now those nominating potential winners must explain how the chefs, restaurants, bartenders, etc., fit into the foundation’s values “centered around creating a more equitable, sustainable, and healthy work culture.”

In light of California’s new $20 minimum wage bill for fast-food workers, which went into effect on April 1, restaurant chains and franchisees are already taking action, in some cases by raising prices by as much as 7-8% for select menu items in the state.

Analysts Eric Gonzalez of Keybanc and Mark Kalinowski scraped data and researched pricing trends over the past couple of months at major restaurant chains to determine how much menu prices have been impacted by surge in labor costs in the state. All eyes are on companies like Chipotle and Starbucks especially, as these brands do not franchise (which is historically an industry anomaly).

According to Kalinowski’s research (which sampled 25 Chipotle restaurants in California), the price of a Chipotle chicken burrito went up 8.3% from February to April, while the cost of a steak burrito increased by 7%. This research is in line with Gonzalez’s analysis, which suggests that pricing at most Chipotle’s 476 stores in California increased by 7-8%. Gonzalez said that Chipotle is actually an unusual case because the company has undervalued its menu prices in the state to compete with the proliferation of other burrito options in California.

ASAP, the food delivery service formerly known as Waitr, has shut down after the company filed for Ch. 7 bankruptcy, according to an 8-K form filed with the U.S. Securities and Exchange Commission on April 2.

Waitr was founded in 2013 as a boutique delivery platform by students at McNeese University and then was officially launched in 2015 before spreading throughout Louisiana and into other regions. In 2018, the company was acquired by Landry’s owner Tilman Fertitta’s blank check company, Landcadia Holdings Inc., for $308 million.

Since then, the company has experienced a series of financial ups and downs as the restaurant industry entered the golden era of food delivery and it was “sink or swim” in the increasingly crowded market. Waitr tried to differentiate itself from competitors like Grubhub and DoorDash by catering toward smaller, independent restaurants in mid-sized cities.

Earlier this month, McDonald’s experienced a systemwide tech outage in several of the company’s global markets, including Australia, the United Kingdom, Japan and Hong Kong. Although the company clarified that the IT outage was not a result of a cybersecurity threat, it took much of the day to fix and get mobile ordering and kiosks back online.

Then, a couple of weeks later, on March 24, Panera Bread also experienced a “massive tech outage” that impacted online ordering, POS systems, and in-store kiosks, as first reported by Silicon Valley Daily, though the company was not as forthcoming as McDonald’s had been about the cause, and Reddit users in the Panera community speculated that it could be a cyberattack of some kind.

Although few details were revealed about either the McDonald’s or Panera outages, the reality is that widespread IT outage can affect operators of any size, and restaurants need to deploy resources from preventing (as much as they can) these issues from happening in the first place.

This year, for the annual Women’s Foodservice Forum Conference, our editors Alicia Kelso, Joanna Fantozzi, and Leigh Anne Zinsmeister traveled out to the Hilton Anatole in Dallas, Texas to meet with the 3,000 attendees at the conference honoring women in the restaurant industry. On the 35th anniversary of the conference, change held a new meaning for conference leaders.

There were keynotes from Luvvie Ajayi Jones, Katty Kay, Cassandra Worthy, and Kendra Scott, as well as networking activities.

At the conference, there were sessions on inclusion, overcoming imposter syndrome, personal branding, boundary setting, communication, and sessions for communities of interest like women of color, LGBTQ, single/working parents.

Ahead, you’ll hear from one of the editors from NRN who attended the conference, Joanna Fantozzi, about her impression of attending for the first time as well as hear what her thoughts are on moving the needle forward for DEI and gender parity at a time when companies are rolling them back or changing language.

KFC announced last week it has achieved gender parity across its global corporate offices, with women now constituting 51% of the company’s restaurant support center team.

According to a press release, KFC has been measuring progress using the McKinsey & Company Inclusion Survey, which tests whether a subset of employees believe they have an equal chance of success within the company. The survey measures the “gender experience gap” to understand the differences in employees’ observed, perceived, and lived experiences.

KFC’s parity milestone comes on the heels of McKinsey’s 2023 Women in the Workplace Report, which shows that for every 100 men promoted from entry-level to managerial positions, just 87 women received similar promotions.

California’s controversial $20 minimum wage for quick-service restaurant workers employed by companies with 60 or more locations is set to finally go into effect on Mon. April 1, after undergoing multiple revisions and pushback from the restaurant industry. Last fall, Gavin Newsom introduced and passed AB 1228, a modified compromise version of the original FAST Act, which increases the minimum wage for fast-food workers from $16 to $20, instead of the originally proposed $22 an hour.

Most recently, the legislation was clarified via assembly bill 610, which carved out some exemptions to the bill, including workers in nontraditional restaurant locations like airports, hotels, event centers, theme parks, and corporate campus cafeterias. Originally, this bill included a carve-out for restaurants that bake their own bread, like Panera, though after pushback, Gov. Newsom was pushed to clarify that Panera would be following the new minimum wage law requirements.  

Ahead of April Fool’s Day, chains have been releasing menu items that may be real. This is a tradition in the restaurant industry where brands promote various menu items that seem outlandish in the hopes that they will drive customers to their stores.

As you’ll hear ahead, some of these menu items have been so popular that they’ve joined menus permanently. Others haven’t even existed.

This year in particular, there are a few chains that seem to be embracing pickles which, in light of yesterday’s episode, would seem to be on trend.

Bret Thorn and I discuss food trends in the industry when it comes to beverages and what’s up ahead.