This week on Nation's Restaurant News the top story was California and Illinois are cracking down on restaurant surcharges and hidden fees. Over the past several years, restaurants have increasingly begun to use surcharges as a tool to keep menu prices down while battling food and labor costs. Last fall, the Federal Trade Commission proposed a ban on “junk fees”, or misleading consumer charges that included, among other things, airline, hotel, and concert tickets, as well as restaurant fees.
In other news, Starbucks reported a same-store sales decline for the second quarter of 2024, for the first time in almost three years since the peak of the pandemic, as shares of the Seattle-based coffee chain plummeted 16% over the past day. According to CEO Laxman Narasimhan, the global same-store sales drop of 4% was driven by declining traffic in North America, issues in China and the Middle East, bad weather, and “a more cautious consumer overall.” Additionally, Starbucks revised its annual fiscal guidance to reflect a more reserved growth outlook as the company attempts to reverse this negative sales trend.
Also, we have written at length about the intensifying competition in the chicken category driven by the accelerating demand for all-things-chicken from consumers. And, for the past several quarters at least, KFC U.S. has been a beneficiary of that rising demand — experiencing positive same-store sales growth in five of the past eight quarters.
Until Q1 2024, in which the chain reported Wednesday that same-store sales were down by 7%, the only other negative same-store sales quarter for the U.S. system in the past two years came in Q2 2022, when it lapped its wildly successful chicken sandwich launch from 2021.
See what else was trending on NRN.com this week.
