Black Box - Restaurant Sales Growth Negative for First Time Since Mid-March
(Data through the week ending December 26, 2021)
Restaurant sales growth experienced a sharp downturn during the week of Christmas, but this was affected by the holiday falling during the weekend. Christmas fell on a Wednesday during the comparable week in 2019. Beyond the effect of the calendar shift, there was some pullback from consumers, likely in response to heightened concerns from the spike in cases of Covid driven by the new Omicron variant. Sales growth was negative for the first time since March 14. It was also the worst week for restaurant traffic during the same period. Sequentially, sales growth declined for all full-service segments compared to the previous week. The most significant drops were in casual dining, upscale casual, and fine dining. Fast-casual experienced a significant improvement in sales growth, while quick-service only experienced a slight increase. The downturn in sales growth was widespread throughout the country, with 24 states plus the District of Columbia posting negative sales growth during the week. Only four states had negative sales growth the previous week. Sales growth performance worsened during the week in all regions of the country. The top performers were the Southeast, Texas, Southwest, and Mountain Plains. The worst performing regions were New England, New York-New Jersey, the Mid-Atlantic, and Midwest.
SHORT INTEREST
BYND is a consensus short, but we still like it short
Taco Bell - "Taco Lover's Pass" subscription service
YUM is a LONG
Taco Bell (YUM) is making its "Taco Lover's Pass" subscription service available around the country.
The 30-day subscription service will be available exclusively on the Taco Bell app across the United States, expanding on a 2021 pilot program in Tuscon, Arizona. Taco Bell is the latest food chain to steal a page from streaming with a subscription model, part of a bid to cultivate customer loyalty and more foot traffic in the pandemic era. For $10, U.S. customers can buy the pass on the app to access the 30-day subscription. Once purchased, customers will unlock a "secret category" on the app, where they will be able to choose one of seven tacos per day and redeem it at a restaurant location. The offer includes the following taco options: Crunchy, Crunchy Supreme, Soft, Soft Supreme, Spicy Potato Soft, Doritos Locos, and the Doritos Locos Supreme. Zipporah Allen, Taco Bell's chief digital officer, says this pass underscores the taco giant's "commitment to digital innovation and value." Saying that "tacos are in our DNA," Allen added that the pass is "a fun way to continue offering unique ways to reward our most loyal fans through our digital access points." During the test period in Tucson, the company found that 20% of Pass purchasers were new to the Taco Bell Rewards Program; meanwhile, an additional 20% renewed it for a second time. And the most popular taco purchased by taco lovers was the Doritos Locos Supreme. Taco Bell is one of many fast-food giants, like McDonald's and Starbucks, looking to capitalize on digitalization to connect with its customers and gain loyalty with unique online-only offerings and deals.
