Restaurant Industry Traffic TRends
Restaurant industry sales trends continue to slow, with QSR slowing significantly over the past three weeks ending June 20th. Casual Dining in California has also turned negative for the first time!
MCD Value Message
MCD is a LONG
Some McDonald's (MCD) locations are doing away with the well-known $1 drink. Sources tipped the Wall Street Journal that at least 16 restaurant coops out of 56 or 28%. The rest of the coops caved to vote to advertise the chain's value menu, instead of the dollar drinks. Some franchisees have already lifted soda prices by several dimes, with at least one noting that the shift has "significantly improved" profits. At the Evercore conference in June, Ian Borden acknowledged the inflation reality, while also stressing that value and affordability were lynchpins of the brand. "We're being very conscious to ensure that we kind of stay on the side of the consumer as we make decisions through this to ensure those really important fundamentals of our business around value and affordability stay as strong as they can."
Panera & HUGS
Panera Brands as well as Caribou Coffee and Einstein Bros. Bagels has announced that there will be no extension of its investment agreement with USHG Acquisition (HUGS) in light of unfavorable capital market conditions. While the parties have collaborated closely since the initial announcement of the transaction, they have agreed not to extend the agreement, which lapsed on June 30, 2022. Panera Brands will continue to prepare for and evaluate a potential public listing should market conditions improve. “Unfortunately, the deterioration of capital market conditions over the last several months has led to the realization that an IPO may not be imminent, and as a result, we felt it was appropriate not to extend our planned partnership," said Niren Chaudhary, CEO of Panera Brands.
