reinventing Starbucks
Starbucks is a SHORT
Yesterday, SBUX announced the creation of the Heritage Market, connecting three of the company's most iconic and most visited stores and the partners (employees) who lead them in Seattle. The stores are located at 1912 Pike Place (Starbucks original store), 1st & Pike, and 1st & University. These three stores represent "the company's historical past, present, and, importantly, its re-imagined future." The three stores will offer an elevated experience steeped in the rich history of Coffee, culture, and connection synonymous with Starbucks. Customers who visit these stores will enjoy the Starbucks Experience and also have the opportunity to engage directly with partners through unique coffee craft experiences, cultural immersions, and educational opportunities. The Heritage Market comes on the back of Howard Schultz's return as CEO of Starbucks and his efforts to reinvent the company. Starbucks recently announced $1 billion in an additional partner and store investments this year, focusing on modernizing training and collaboration, store innovation, and the celebration of Coffee. As part of that commitment, the company has launched a series of collaboration sessions directly with partners, aiming to re-imagine the company's future together. The Heritage Market is a continuation of that commitment.
The company is gearing up for the upcoming analyst meeting. Can you reinvent the company to stop unionization efforts and spend only $1.0 billion?
Krispy Kreme & ICE Kreme
DNUT is a LONG
A product extension into ice cream is better than Coffee.
The company on Tuesday said it has added Original Glazed Soft Serve Ice Cream to its locations in 10 markets and is planning to add the product to additional locations "soon." The company will use the ice cream in shakes and cones and will offer toppings such as pieces of Krispy Kreme doughnuts. Krispy Kreme said that its ice cream is made with ingredients from its "secret" Original Glazed doughnut recipe, including its glaze flavor and whole milk. The company's new lineup of ice cream treats will feature seven recipes of shakes: Original Glazed, Strawberry Iced Sprinkled, Chocolate Iced, Lemon Filled, Cookies & Kreme, Birthday Batter, and Coffee and Kreme. It will also feature three flavors of cups and waffle cones, including Original Glazed, Strawberry Iced Sprinkled, and Chocolate Iced, and customers can choose toppings. The ten markets with the ice cream are Charlotte, Greensboro, and Winston-Salem, N.C.; Greenville, S.C.; Norfolk and Newport News, Va.; Charleston, W.Va.; Nashville and the Tri-Cities area of Tennessee; and San Antonio. Shops in Alabama, Florida, New Orleans, Missouri, and Kansas will start offering the ice cream soon.
RRGB HAS Traffic problems
As inflation rises and a recession looms, industry discounting will accelerate. Red Robin plans a combination of value meals and an ongoing rotation of higher-priced limited-time to preserve some margin. "We're prepared for a softening consumer as we move through this year," CEO Paul Murphy. Red Robin is looking at a new $10 Gourmet Meal Deal in a test in a few markets. It will expand further over the next couple of weeks, including the chain's signature bottomless fries and drinks offer. It will also offer an LTO program of the Whiskey River Backyard BBQ menu and a Pineapple Upside-Down Cake Milkshake that are more expensive. Still, the company hopes offering them alongside the $10 value meal will not destroy margins. Red Robin pricing in the 1Q22 was 5.4%, below the 8.7% increase at full-service restaurants overall for April. The company also hopes to drive transactions with its Red Robin Royalty program, which currently has 10.6 million members.
As seen in the chart below, the announcement of the new value strategy comes on the back of a significant deceleration in transactions in 2Q22
