Non bank aligned chain restaurant analyst, with a non consensus outlook: we focus on the fundamentals, not the fluff.

San Diego, CA
Joined July 2009
See very well conceptualized article by @QSRmagazine regarding consumer shifts as well as changed marketing thrust by @McDonalds . After 2 years of uber discounting (and flat sales) they are changing course and working quality and new products. Good for them. They are very late to a very important date. Some $MCD pieces need work of course. This is sharp philosophical rebuke to @jonathanmaze and the marketing agencies who were all about price, price and price. Like the bad insurance ad. I bet Maze would take back his "margin donation" solution talk on @CNBC in September 2024 if he could. #restaurants
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John A. Gordon retweeted
New national frozen carbonated flavor rollout is underway: Frozen Blue Raspberry, Coke & the new Peach Sprite. Usually local markets vote on flavors, with Coke typically mandated and Blue Raspberry most popular, making the third barrel a local option. This decision eliminates all Dr Pepper. No votes were cast. It’s not that I dislike the flavor; the protocol followed was odd. The machine wasn’t subsidized, so three mandated flavors weren’t on the docket when purchased.
Down!🤤🍑🥤 NEW McDonald’s Frozen White Peach is showing up at some locations now. 📍First find comes to us from California! Check your McD’s app to see when your locations will have it. Find it at participating locations nationwide soon. I’ll update with more locations soon. (News/Image::McDonald’s worker/app, Thanks Angie for the first find!✊🏻) Will you try this👇🏻
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Lots of #restaurant discussion this week about QSR fast food pricing, discounting , resulting guest expectations, restaurant margins, ability to fund remodels and CAPEX. There was an excellent post and discussion yesterday by @McFranchisee who I guarantee knows his stuff. This issue has been present through the decades. Relative to @McDonalds specifically, it is telling that two earnings calls ago they defended low company McOPCO margins, and now they are refranchising. Causal connection with expansive low price focus? McDonalds needs to operate some company units. #fastfood #consumerdiscretionary #securityanalysts #franchising
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John A. Gordon retweeted
100% - ready for a hot take? 🔥 What people don't understand is that we ran the Dollar Menu for over a decade, and the last half of that run was a fight. It was debated internally every year. The margins were never there, and there was always a push to kill it because it simply wasn't sustainable. Today, I can’t build a McDouble for $1 on food cost alone. My margins are at historical lows (not a good thing). Nostalgia doesn't do math, beef and wages have both close to tripled since the Dollar Menu days, but that $1 price is burned into people's heads like it is canonized scripture. 🎯 McD catches every arrow for all inflation fatigue while being, on national average, pretty much the overall cheapest major QSR in the country. Cheaper than BK, Wendy's, SNS, etc. We'll have this exact same conversation in ten years about today’s McD $5 Meal Deal, people will swear it was the last honest price in America but we don’t get credit for it now - like the old dollar menu. The Dollar Menu looks like a better deal now than it ever was then. Memory inflates it even more. That's the real danger of promotions: they don't just move product, they reset what customers think your food should cost, even 10 years down the road. We can be a dollar or two cheaper than BK on the same meal and get zero credit for it, because we're not being compared to BK - we are being compared to McD 2008. That's the fight.
I'm curious on your perspective of if the dollar menu and 5 dollar footlong promotions have hurt perception of price in the long run for either business? Both got me through high school (we had open campus lunch) in the mid-late 2000s. 5 bucks went a long way then. @McFranchisee
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Pie Five Pizza is down to 13 locations restaurantbusinessonline.com… Thank you @BGbunster for a comprehensive review! I've had two analytical engagements RE $RAVE. While there was secular pizza demand retrenchment, high turnover and management/investor confusion can be seen there. #restaurants
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Portillo's lays off corporate staff as it seeks to cut costs restaurantbusinessonline.com… $PTLO New CEO: "Candidly, we built too many units too quicly" We see this time and again over the decades. There should be a textbook....thank you @livetodineout
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nrn.com/casual-dining/texas-… Texas Roadhouse really is doing well. Note that it currently does not franchise going forward (and not much at all); does not advertise much and has plowed those savings into food portions and quality. A #restaurant operator's dream. @JoeGuszkowski
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Research now showing that #restaurant guests want good food. Price does not disappear as factor but is generally in the back seat. Some #restaurant chains have already made moves. This sentiment to quality must be a bitter pill for @jonathanmaze to swallow, as he has been the apostle for cheap. @RB_magazine.
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Absolutely @McFranchisee. After doing this for a long time, I'd mention that there are about 18 driver factors, but brand, menu pricing, product mix, distributor costs and store efficiency top the list. Look at your peers first. Some brands use a theoretical food cost calculation. I can talk about that. For food cost % by chain call me. I have it all back to mid 1990s. jgordon@pacificmanagementxconsultinggroup,com or @JohnAGordon #restaurants
Base Food Cost (%) is such an interesting metric. It’s the lifeblood of any restaurant: the raw cost of a dish divided by the price you charge for it. However, there’s no North Star/corporate standard. If I talk to 10 different operators, I’ll get 10 different answers. It’s interesting to have so many differing opinions on something so fundamental. What base food cost % do you see in your restaurant?
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John A. Gordon retweeted
Base Food Cost (%) is such an interesting metric. It’s the lifeblood of any restaurant: the raw cost of a dish divided by the price you charge for it. However, there’s no North Star/corporate standard. If I talk to 10 different operators, I’ll get 10 different answers. It’s interesting to have so many differing opinions on something so fundamental. What base food cost % do you see in your restaurant?
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So $KURA was able to hold up sales and a price increase at the same time: A secret: tokens and toys. Hat tip to @McFranchisee for pointing out the importance of toys and merch in restaurants Kura Sushi Hangs On to Diners Despite Price Increases - WSJ
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