Burger King is playing defensive
QSR's Version of BBV2020 - Burger King plans significant increase spending in the next two years toward revamping restaurants and marketing.
Per a press release issued by QSR on Friday afternoon, $400M will be allocated to increasing "advertising firepower," restaurant remodels, and new technology and digital investments. The investment will be divided into two parts, whereby $150M will be put toward advertising and digital investments, and $250M will be set aside for "restaurant technology, kitchen equipment, building enhancements, and high-quality remodels and relocations." According to the company statement, more than 93% of US-based restaurants endorsed the plan. "Our $400M investment into the Burger King U.S. system represents a substantial deployment of capital toward important marketing and image investments aimed at accelerating our sales growth and modernizing our iconic brand across the U.S. In 2023 and 2024; these investments are expected to have an average annual impact to adjusted EPS of approximately ($0.10) to ($0.12), before considering benefits from any potential sales improvements," Restaurant Brands (QSR) CFO Matt Dunnigan said. "In 2025 and beyond, we expect the impact to be accretive to adjusted EPS as our advertising investments conclude, and we realize the long-term sales benefits of our Reclaim the Flame initiatives and increased advertising contributions from our system."
New Technology for dpz
Picnic, a Seattle-based automation startup, is partnering with Domino's to test its pizza-assembly machine in a functioning Domino's store in Berlin, Germany. The two companies have been working together since 2021 to research and test in preparation for the launch. The collaboration coincides with a shortage in food service labor and Domino's rapid expansion into new market geographies. Domino's aims to more than double the number of restaurants it currently has over the next decade, adding about 100,000 employees to its global workforce. The pizza giant already has 3,400 stores in 10 markets. Since the start of the collaboration, Domino's leaders from Europe, Asia, and Australia have visited Picnic headquarters in Seattle to explore implementing food tech into their stores. A team of experts decided Berlin marked the best place to launch the pilot project. Picnic deployed its Picnic Pizza Station in Domino's Tiergarten store in Berlin and will monitor its performance over the remainder of the trial period. Founded in 2016, Picnic has raised more than $20 million to sell food assembly robots to restaurants and hospitality companies. The company also announced recently that it partnered with Seattle-based Moto to automate the production of its pizzas.
Knapp Track (AUG)
Casual Dining Sales Accelerate in August - on a 2-year basis, SSS accelerated on 50bps
COMPARABLE SALES COMPARABLE GUEST COUNTS
USA 6.0% -3.1%
CALIFORNIA 8.3% -0.5%
TEXAS 5.4% -3.4%
FLORIDA 9.6% -0.1%
