CMG wants you to think globally now
CMG today announced it is launching Chicken al Pastor, a new protein option rolling out at Chipotle restaurants worldwide for a limited time, marking the first time the Company has launched a new menu innovation globally. As its business in the USA slows, the company wants to focus the investment community on its international presence. The company press release said, "launching Chicken al Pastor at all 3,200+ company-owned Chipotle restaurants worldwide in U.S., Canada, U.K., France, and Germany will simultaneously have access to Chipotle's latest menu innovation." What the press release didn't mention is that as of 12/31/22, there are only 53 restaurants internationally or 1.7% of total restaurants suggesting CMG has very little revenue coming from those countries. The PR also said, "the stage-gate process to validate Chicken al Pastor before determining a rollout plan" was done in only 94 stores in two test markets (Denver and Indianapolis). This is not a very big or broad test market for the new product; the company can't afford to have this LTO be disappointing. Also, note the complexity of preparing the new product as it is "prepared in small batches throughout the day." Increasing complexity has been shown to slow sales, not improve them.
BOWL
The saying goes, "first you roll up; then blow up" Will this be the fate of BOWL too? No signs of any issue as of the current reporting period, but sales for the restaurant industry are slowing.
Bowlero (BOWL) has entered into a definitive agreement to acquire Paradise Lanes Entertainment Center in Washington State. This center features 32 bowling lanes, an arcade, billiards, a full-service bar and restaurant, and VIP party rooms. This acquisition marks the company’s 4th location in the state of Washington.
Ride-sharing relief
Ride-sharing and delivery companies UBER, LYFT, and DASH can now continue to treat their drivers as independent contractors after a California court reversed a lower-court decision on Monday. Proposition 22, which kept California’s independent contractor law AB5 from applying to app-based drivers like those from Uber and DoorDash, has been kept alive by a state appellate court ruling. In a decision that lays the groundwork for an appeal, because the three-judge panel did not fully agree on the issues, the Court of Appeal for the 1st Appellate District reversed the core of an earlier decision that Prop 22 was unconstitutional in exempting app-based workers from AB5. That lower court decision from August 2021 was stayed and app-based workers, mostly drivers, continued to work without being impacted by the more restrictive independent contractor definitions of AB5. Instacart, whose workers are similar to personal shoppers, also was exempted.
