WASHINGTON —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
James A. Flynn, chief executive of Wingstop Restaurants, cited his 380-unit chain’s 24 straight quarters of same-store sales growth but expressed his preoccupation with commodity-purchasing pressures. Though 75 percent of Wingstop’s sales are chicken, “we don’t have a yearlong contract,” he said, pointing to the extreme volatility he has seen in the per-pound price of poultry during his CEO tenure, ranging from as little as 40 cents to $1.50. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Flynn said Richardson, Texas-based Wingstop has a “continuous concern about the supply and price of chicken, and I don’t think that’s going to change at all.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Similarly, the First Watch breakfast-lunch-only chain’s 76 restaurants in 11 states are wrestling with inflationary pressures on a key food product. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“For 24 years, eggs were a stable commodity for us,” said Kenneth L. Pendery Jr., president and CEO of Bradenton, Fla.-based First Watch Restaurants. “But this year, they’re up three to four times.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Under questioning from panel moderator James C. Doherty, group publisher of Nation’s Restaurant News and executive vice president of parent company Lebhar-Friedman Inc., the Golden Chain honorees shared with their MUFSO audience other concerns about cost inflation, even if mitigated by sales victories. The session was sponsored by American Express. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
CKE Restaurants Inc.’s Hardee’s and Carl’s Jr. chains can boast $6 check averages, “about the highest in fast food,” said Andrew Puzder, president and CEO of the Carpinteria, Calif.-based company, adding, “We have the best margins in the fast-food business, and we make the most money per restaurant.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Puzder conceded that “it’s been tough, though; our margins are not what they were in 2006.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Sales for the CKE chains have been kept aloft by their focus on premium-priced Angus beef burgers, with none of the two brands’ advertising featuring available 99-cent items. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“We went the opposite direction from where our competitors were going, and it’s been very successful for us,” Puzder said of his chains’ upscale orientation, noting that margins had inched up for the past four quarters despite rising ingredient costs. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Meanwhile, Hardee’s and Carl’s Jr. have had to confront “competitors who are doing deep discounts, even giving food away,” but “we’re not going to play that game,” Puzder vowed. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
The 200-plus-unit Jason’s Deli also intends to stick to its marketing focus as a point of differentiation, founder and president Joseph V. Tortorice Jr. said of the chain’s “healthy” attributes. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“If we can maintain that, we can maintain service levels, and those will continue to drive sales,” he said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Jason’s Deli’s menu emphasizes that “everything we serve is free of artificial trans fats and MSG,” and that the chain’s “real choices” for side dishes include organic blue-corn tortilla chips and homemade salsa, fresh fruit, steamed vegetables or baked chips. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Forecasting that Jason’s Deli would notch same-store sales growth of 7 percent next year, Tortorice said the Beaumont, Texas-based chain’s biggest challenge would be retaining its corporate culture of service amid continued growth. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Taco Bell president Greg Creed, who represented MUFSO Pioneer Award winner Glen Bell on the Presidents’ Panel, also touched on growth challenges, noting that his chain was cracking such new international markets as India, the Philippines, Japan, “even Mexico.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Golden Chain awardee Jerry Deitchle, chairman and CEO of BJ’s Restaurants, brought the conversation into a more direct focus on the extreme gridlock affecting financiers and the unprecedented one-week crash of the stock market just before MUFSO convened. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“It’s important that we have more predictability restored to our economy” and to the top-line prospects of restaurant operators, said Deitchle, whose 80-unit BJ’s chain has managed to buck the slump besetting most other casual-dining chains. “Supply-demand got a little out of balance with respect to the cost of credit.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Puzder, conceding that his New York Stock Exchange-traded company was concerned about investors’ growing pessimism, wondered aloud whether CKE ought to be tapping what leverage it still could muster. “Should we be drawing down on our [revolving line of credit] now, because it’s not going to be available in six months?” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
As for factors more within the company’s control, Puzder noted that CKE’s chains would continue to exploit the often-edgy “personality” they project to young males through the $60 million each the two brands spend annually to promote their bigger-better-burger messages. That $120 million total compares with the $810 million McDonald’s spends on ads aimed at a different demographic, to “own women and children,” he said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
As for seemingly worsening macroeconomic challenges that could threaten CKE’s pricing stance, the CEO expressed a confidence in the industry’s overall positioning. “Food is not a luxury item,” he declared. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Puzder also touched on favorable in-store marketing trends in the areas of flat-panel television services and self-ordering menu terminals. Providers of the TVs stream a variety of sponsored informational and entertainment programming to customers and allow the CKE chains to show their ad messages. Compared with costs incurred for conventional canned-music soundtracks for dining rooms, the TV services are different in that “they pay you,” he said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
As for the touch-screen kiosks now in use at some CKE restaurants, “if the price comes down low enough—and it’s not at the moment—you can really get some labor savings,” Puzder said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
The panelists also confronted the thorny question of how a franchisor might aid operators whose access to growth capital was being blocked by the massive credit crunch emanating from Wall Street. But it was acknowledged that the so-called Fin 46 reporting rule imposed on public companies by the U.S. Financial Accounting Standards Board in the wake of the Enron scandal could thwart such initiatives because it could require a franchisor to guarantee any loan arranged on behalf of a franchisee. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Surmounting the nation’s fiscal crisis could hinge on fundamentals, some panelists said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“The key thing for me,” Taco Bell’s Creed remarked, “is to keep the top line growing and have sensible margins with the proper pricing.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
With Tortorice forecasting 7-percent same-store sales growth for Jason’s Deli, and Flynn of Wingstop also predicting “positive comps” for 2009, two other Golden Chain honorees expressed a mixed outlook. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
“We think next year is going to be a good year for the industry and a good year for us,” CKE’s Puzder said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
But BJ’s chief Deitchle said he expects 2009 to bring a worsening of commodity cost inflation, with another rise of 6 percent to 8 percent. “We’re not going to push the panic button…but we can’t keep our head in the sand,” he said. —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
In the current economic climate, “you can’t price your way to success, and you can’t save your way to success,” Deitchle said. “You can only grow your way to success.” —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
Economy, politics take center stage at confab —True to a now-49-year tradition, the Presidents’ Panel was a centerpiece of the Multi-Unit Foodservice Operators conference, showcasing this year’s Golden Chain award-winning brand leaders and their current concerns about economic headwinds threatening profit margins.
