BLACK BOX SALES
Sales and traffic growth worsened the first week of 2022, hitting the lowest levels since late February.
The restaurant industry saw sales growth decline compared to the average during the first three weeks in December (before holiday headwinds), but the weather also may have played some part. The regions with the most significant drops in sales during the week were the Mid-Atlantic, New England, and New York-New Jersey. The segments that saw the most significant declines in sales growth were upscale-casual and casual dining, while the segments that we're able to weather the downturn better were fast casual and quick service. The decline stems from consumers' new concerns due to the Omicron variant, delivery and to-go sales growth accelerated in recent weeks, while dine-in sales growth has declined further. This is a big negative for casual dining and less for names like MCD & YUM.
MCPLANT is coming to more McDonald's locations.
We have been fully expecting an expansion in MCD test markets
MCD is LONG; BYND is a SHORT
MCD said Thursday said it plans to expand its McPlant test to some 600 locations in the San Francisco and Dallas-Fort Worth areas starting Feb. 14, giving the company a better sense of consumer demand for the product. Does the expansion put the product on a path toward a potential national introduction? Possible, but it's still not a sure thing. McDonald's has been conducting its limited operations test of the McPlant at eight locations and has been toying with plant-based burgers for years. The company tested a plant-based burger in Canada starting in 2019 and then in 2020 announced the creation of the McPlant, giving global markets the option for putting the plant-based burger on their menus. Various countries have since tested or added the product to its menu, including the U.K., Sweden, Denmark, the Netherlands, and Austria. But the U.S., where McDonald's has 13,800 locations, is the company's biggest market. The best we can tell is the franchisees are not behind the move to sell McPlant, as smaller menus have helped its operators serve customers more quickly, and McPlant is complex to execute operationally. It is even more of an operational challenge at a time when labor remains scarce, and ease of operations is considered an important point for keeping workers on hand. The product is also not vegan—it is prepared on the same grill in which the chain makes eggs and burgers.
SBUX CHINA
SBUX is a long
SBUX expanded its delivery and online services in China through a new partnership with Meituan to give customers more options, including social features. Meituan is China's most prominent food delivery platform, with more than 660 million transacting users. The company notes that 60 stores in Beijing, Shanghai, Shenzhen, and Chengdu now include the service, and more expansion is anticipated. SBUX says the partnership also marks the delivery debut of its Starbucks Reserve range of coffee in China. The effort by Starbucks to build customer loyalty in China follows the tech flywheel it has built up in the U.S. Starbucks' loyalty program is a valuable asset as it ties consumers more closely to the brand and increases order frequency.
