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While the economy is still limiting the number of times per week consumers opt to eat out, there are signs of improvement in the industry. The National Restaurant Association's Restaurant Performance Index (RPI) remained above 100 for the fourth consecutive month in February (the most recent stats available). The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.9 in February, up 0.6 percent from January's level of 101.3.
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction. The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.9 in February – up 1.3 percent from January's level of 100.6. In addition, the Current Situation Index stood above 100 for the fourth consecutive month, which signifies expansion in the current situation indicators. Which sector of the restaurant industry do you think is poised to benefit the fastest if and/when tthe economy improves?  User Rank
Iron NO RATINGS
The quick serve sector naturally lends itself to somewhat lower pricing in comparison with other restaurant segments. While that might mean they have a chance to get back on their feet faster it is no guarantee in this economy.
Burger King Holdings, for example, said in its annual report for 2011 that it was enhancing its menu to reach a broader range of customers as well as pursuing other initiatives to increase profitability. Overall unemployment levels, consumer demand, and other economic factors naturally remain serious issues. Burger King also said it is revamping its restaurants to increase their appeal with customers. The effectiveness of this overhaul could have a major influence on the company's future revenue growth. The casual dining sector has also had a tough time. Back in 2008, company-owned Bennigan's locations shut down practically overnight when then-parent Metromedia Restaurant Group filed for chapter 7 bankruptcy. Bennigan's has since been bought out buy new owners who are trying rebuild the chain. Smaller players in casual dining have not been safe either. Regional casual dining chain Charlie Brown's Steakhouse in New Jersey filed for bankruptcy in 2010, shut locations, and was later bought out. It will come down to how nimble these companies are in matching their costs to the current market and proving their value to consumers again.  User Rank
Platinum NO RATINGS
I just saw a study that says younger people are flocking to fast casual restaurants in greater numbers. There is a preference for restaurants where you can see the food prepared, so chains like Chipotle are doing well. As the economy and outlook improves, people seem willing to go out more often. It really looks like things are looking up.
 User Rank
Platinum NO RATINGS
Interesting post, @Joao-Pierre! SO glad that Taco Bell resolved the "Beef or not beef" question that was dragging down revenues. As an Angelino ex-pat I love Taco Bell, though I would be the size of the Liberty Bell if I ate much of it!
I'm questioning though, how much growth is really coming from the rebound in US consumer spending. Seems like a lot of the growth is international in emerging markets. User Rank
Blogger NO RATINGS
You know what amazes me about Taco Bell? The fact that consumers thought a regular old taco was so lacking in flavor that it needed a Dorito flavored shell. Can someone say "overkill"?
User Rank
Blogger NO RATINGS
Re: emerging markets During the 4th quarter conference call in February, CFO Rick Carucci was pretty clear about the direction Yum! was heading. He said it will continue to sell company-owned US restaurants to franchisees so that it can focus more on international markets.
"Our philosophy is really pretty simple," Carucci said. "We reduce company ownership in highly penetrated or under-performing markets, and we increase exposure in emerging and under-penetrated markets" such as China, India, Russia, Africa, France and Germany. (Think those consumers ever heard the rumors that KFC changed its name from Kentucky Fried Chicken because it doesn't really sell chicken? To wit: "KFC does not use real chickens. They actually use genetically manipulated organisms. These so called "chickens" are kept alive by tubes inserted into their bodies to pump blood and nutrients throughout their structure. They have no beaks, no feathers, and no feet. Their bone structure is dramatically shrunk to get more meat out of them. This is great for KFC because they do not have to pay so much for their production costs. There is no more plucking of the feathers or the removal of the beaks and feet." User Rank
Platinum NO RATINGS
@Noreen, I have never heard anything so disgusting in all my life as that description of the KFC Frankenchickens! They ate better in Oceania in 1984!
 User Rank
Blogger NO RATINGS
It's interesting the theme of "China consumer awakening" seems to be gaining momentum -- Apple's earninings involved lots of Chinese growth, YUM is doing great there, and many other companies are seeing expansion from the Chinese consumer.
User Rank
Blogger NO RATINGS
I know. Not to mention the simple economic truth: Isn't it cheaper just to use real chicken?
 User Rank
Iron NO RATINGS
No wonder KFC is so successful in emergying markets. Just went to couple of KFC resturants in China, amazing to see they got some special menus there. Like this one, they serve congee there. Shall they be more creative in North America?
  User Rank
Platinum NO RATINGS
Guys,
SPeaking about KFC,they just lost a case for USD 8.3 million in Australia. Now that is most certainly not what Yum brands would like to see.Especially the publicity part of it.. A girl goes brain dead after eating at KFC,not good news. http://www.bbc.co.uk/news/world-asia-17867168 Ashish. User Rank
Blogger NO RATINGS
That is a terrible story Ashish - especially the part that notes "at busy times the restaurant would reuse chicken that had been dropped on the floor."
User Rank
Platinum NO RATINGS
Noreen,
I am most worried about what exactly happened to the Girl. She supposedly suffered from Salmonella poisoning and then her memory was damaged.One would'nt wish this for one's enemy but to do it to a little girl is really scary. Supposedly the Poisoning triggered some sort of Metabolic Reaction which affected her Immune system and ended up damaging the little girl. As a Fan of KFC ,I am genuinely worried about exactly happened here and whether or not I should quit eating KFC. The stone-walling of KFC(they refused to take any responsibility and tried to wash their hands of the whole affair) does'nt help things.If nothing else,they should have offered to pay for all the Girl's medical expenses till date (as a Goodwill gesture) rather than force parents to fight for this through Court. Regards Ashish. User Rank
Blogger NO RATINGS
I know I'll come off sounding like some elitist snob but my family eats almost no fast food. The closest we come is ordering a pizza now and then -- but we try to stick with the local high-quality providers.
Why is that? Because most fast food has terrible nutritional value. High fat, high sugar, low nutrition. I read the book "Fast Food Nation" once (highly recommended) and never looked back. Though ever now and then I get that craving for an egg McMuffin and I break down... --scott User Rank
Platinum NO RATINGS
Scott,
I am willing to bet that if you ran a Poll on Investor Uprising Today asking the readers on this website , "How often they eat Fast food like McDonalds,KFC,Pizza Hut,Taco Bell,etc ?" The Answer could surprise you(I have a feeling hardly anybody here eats it more than Twice a week). Which is what is the situation even in my Families case. Most of the crowd at IU is highly educated and with a strong Professional Background(who tend to take a lot of interest in their personal Health).This kind of Crowd is most unlikely to frequent the likes of KFC and McDonalds very frequently. I really like your thoughts of buying only Food from the Local High-Quality Providers.This is the Best way you can add to the Local Economy and help it flourish. Regards Ashish.  User Rank
Iron NO RATINGS
"Though ever now and then I get that craving for an egg McMuffin and I break down..."
@scott, hahahaha...I hear ya. Sometimes you just have to throw caution to the wind and dig into a 1200 calorie breakfast. If for no other reason than to appreciate how much better you feel when you don't eat this fast food garbage... User Rank
Blogger NO RATINGS
Ashish, I haven't eaten KFC in more than a decade. The battered mice stories freaked me out -- and I worked at a burger king and an Arby's in high school. Saw the kitchen and lost my appetite!
User Rank
Iron NO RATINGS
All stories freaked me out. Now I need to think twice to eat at any fast food resturants.
User Rank
Platinum NO RATINGS
Noreen,
If you were to read the Posts here from Start to finish;it sounds like a I hate Fast Food kinda blog!!! IF Senior Management at KFC were to see this ,I am sure they would freak out!!! Ashish. User Rank
Blogger NO RATINGS
My brother-in-law worked at KFC in high school. He eventually rose to be a store manager. He has some scary stories. Remember that urban myth about them puttin certain things in the batter?
User Rank
Iron NO RATINGS
Scott,
Most of us probably agree fast food's high fat, high suger and low nutrition. But putting some things in the batter? Poison? Or something with bad quality, something they know it's harmful? Well, sounds like scary story happened in China. Is that true? User Rank
Blogger NO RATINGS
The girl in the Australian lawsuit suffered brain damage because of salmonella infected chicken. It wasnt overtly poisoned but sounds as if poor handling of the chicken may have contributed to the girls illness.
User Rank
Blogger NO RATINGS
I eat very little fast food too -- pizza from a local shop, chil-fil-a when I travel, and shake shack, which was founded by a NYC restaurateur and has good quality stuff.
User Rank
Iron NO RATINGS
"The girl in the Australian lawsuit suffered brain damage because of salmonella infected chicken. It wasnt overtly poisoned but sounds as if poor handling of the chicken may have contributed to the girls illness."
I have to say, it never even occurred to me how dangerous it must be to trust some of the "cooks" at a fast food place when it comes to food safety/cross contamination. Judging by some of the dolts I've dealt with at the counter...I can only imagine what codes are being violated behind the scene... User Rank
Iron NO RATINGS
Ashish,
What a scary story about the Australian girl and KFC. I actually want to learn more about this story though, that article just did not have enough info for me. To the KFC's point in that story, I wonder how it can be proven that the Salmonella poisoning occurred there and not somewhere else. It seems to me that the only way you could prove it was from that store is if other people outside of the family got sick there as well. Regardless of all of that though, what an absolutely frightening story. User Rank
Platinum NO RATINGS
I'm no expert on food-borne illnesses, but I think salmonella is more likely to be a threat from chickens (and eggs) and e. coli is more likely to be a threat from employees not washing their hands.
Yum!  User Rank
Platinum NO RATINGS
The root of the problem is still fast food employees. If you think Fast food is not healthy, you have the option to stay away. But if you ordered the food, you expect it is clean and properly prepared. On the contrary, consumers got rotten food, and even spit in the drink (http://hotair.com/greenroom/archives/2012/04/20/mcdonalds-employee-arrested-for-spitting-in-customers-drink/).
With minimum wage and no health insurance coverage, most front counter employees are not so happy, or proud of their works. Bad things are sure to happen from disgruntled employees  User Rank
Platinum NO RATINGS
@Value Hiker, Yum! corporate and other large restaurant chains spend millions in risk management, menu creation and logistics to ensure that customers receive uniform good service no matter where they are ordering their food across the country, and to ensure that their employees have safe and reasonable work environments. One can say that's an impossible proposition no matter how much they spend because of what you mentioned: disgruntled employees are everywhere, especially in low-wage environments, and are more impossible to predict than tornados, outbreaks of food-borne illness, customer slips and falls, and other more common risks.
User Rank
Blogger NO RATINGS
As a former fast food worker I can tell you many of the shortcuts that hurt quality are unsanctioned store manager decisions. They do questionable things to boost store revenues, including reuse of product that should be discarded, according to official protocol.
User Rank
Platinum NO RATINGS
@Noreen, I am surprised to learn store manager is more guilty than regular workers. Do store managers usually have the long term interests in the business? Do they get intense & frequent training in MacDonald/KFC/... Universities ? Do they earn 6 digit compensation each year?
I assume that at least these store managers cares a lot about customers. It seems I am wrong. I guess I get one more reason to stay away from the food of MCD or YUMs. User Rank
Blogger NO RATINGS
I'm going back a long way -- to high school. But my recollection was that the assistant managers on each shift competed with each other to do the best in sales, etc and that drove them to make questionable decisions. We'd reuse mayonnaise that had been out for our full shift rather than dumping it at closing...they let a woman with severe eczema (on her hands!) prepare food without gloves...did I mention the mice that would fall asleep in the Styrofoam boxes stored in the basement (you know, the ones they put your sandwich in?).
On the bright side, for a kid anyway, they held a holiday party and served alcohol to all of us (yep the drinking age was 21 in Pennsylvania). I was 16. Whatever. It was a weird experience. User Rank
Platinum NO RATINGS
Oh thanks Noreen, now none of us can eat fast food for fear of what corners have been cut.
I too worked in food service some yeas ago - in an ice cream shop. Our managers ran a clean store - I didn't see anything that would make me think twice about eating there. On the other hand we didn't have parties with alcohol either, unless maraschino cherries have alcohol? I do remember enjoying an absurdly huge number of cherries on our free daily Banana splits or sundaes. Ah.. To eat like a teenager. User Rank
Blogger NO RATINGS
Don't give up on all fast food! Just be prudent. I don't care if a restaurant is part of a chain or not. You need to use your senses to determine if it seems clean and well run, and resist the urge to simply assume everything is fine because of the name on the door.
User Rank
Platinum NO RATINGS
I used to have a high school biology teacher who swore that we should always eat fast food when on road trips in strange places because they posed less risk of food poisoning them some unknown mom and pop shop. Because of standardization of product and sanitation procedure. Then I met Noreeen.
User Rank
Blogger NO RATINGS
Ha ha! I'm an equal opportunity cynic -- There are good and bad restaurants of all kinds.
User Rank
Iron NO RATINGS
"I used to have a high school biology teacher who swore that we should always eat fast food when on road trips in strange places because they posed less risk of food poisoning them some unknown mom and pop shop. Because of standardization of product and sanitation procedure. Then I met Noreeen."
LOL! That is easily the best thing I've read on IU thus far hahahaha. It's funny because it's true :-/ User Rank
Platinum NO RATINGS
@Broadway, your teacher was right. Consumers, just like investors, hate uncertainty. People are less willing to take risk during unfamilar environment. The whole chain restaurant is built on this idea.
Costco CEO, Jim Sinegall, once told reporter that Costco will try its best to maintain the same low price for all products as long as possible. He despised the gerenal practice of special discount on certain product widely used by other retailers. It is one of the reason Costco has so many loyal customers User Rank
Blogger NO RATINGS
Consistent quality and/or low prices will keep people coming back. The problems occur when a retail establishment becomes consistently lackluster!
User Rank
Platinum NO RATINGS
Noreen, the problem with most mass-market, countrywide chains -- both restaurants and retail overall -- is that the drive for consistency usually leads toward mediocrity and blandness at best. It's easier to ensure that than excellence and creativity is way too unpredictable.
 User Rank
Platinum NO RATINGS
Good points @Broadway. But I have to admit I miss the diversity that used to exist from place to place.
User Rank
Platinum NO RATINGS
@Drivewaygirl, for as hard as the big chains try to drive diversity out of their operations, they cannot escape the human factor. So if you go to -- just using them as an example -- a Wendy's in a suburb of Charlotte, NC, you still get a totally and perhaps tastier and friendlier experience than if you go to one in ubran Philadelphia (where fast food experiences, from my first-hand view) can be treacherous and highly variable. On a recent trip to Dallas, I swear my iced coffee at Starbucks was far tastier and less watered down than what I get in my hometown of Philly. Is Starbucks trying to rip off the Philadelphians with watered down iced coffee? Probably not ... just managers in Starbucks OKing stronger brews in Texas.
 User Rank
Iron NO RATINGS
But I still miss all those quirky little mom and pop places, for both food and clothing.
User Rank
Iron NO RATINGS
"Don't give up on all fast food! Just be prudent. I don't care if a restaurant is part of a chain or not. You need to use your senses to determine if it seems clean and well run, and resist the urge to simply assume everything is fine because of the name on the door."
@Noreen, that's the thing...this kind of stuff can happen anywhere. The unfortunate truth is that there's a higher likelihood of this kind of stuff happening at fast food places because of a lack of training and a lack of caring from the personnel.  User Rank
Platinum NO RATINGS
I agree, @ChapAnjou. It seems to me that you'd be safer in many cases with a family run local place, where everyone has a sense of pride in the place.
User Rank
Iron NO RATINGS
"The root of the problem is still fast food employees."
@Value Hiker, exactly! There's absolutely no one in the fast food industry (except franchise owners) that are proud of what they do. They're there to bring home a paycheck and that's all. Honestly, I don't blame them...I wouldn't be proud working in one of those rat holes either. Unfortunately though, like you said, with a lack of pride also comes a lack of respect for both customers and the care that needs to be taken when dealing with raw foods. User Rank
Blogger NO RATINGS
Salmonella is disgusting. Now that I have that out of the way, consider this:
Salmonella can be contracted via contact with other Salmonella reservoirs including dogs, cats, pigs, reptiles, rodents, cattle, and other infected people. An infected person or animal will often shed infectious bacteria in their feces. Any food product that has come into contact with animal feces — including fruits and vegetables — can spread Salmonella. And: Food may also become contaminated by the unwashed hands of an infected food handler who might or might not be showing symptoms. Salmonella can also be found in the feces of some pets, especially those with diarrhea. People can become infected if they do not wash their hands after contact with these feces. Reptiles are particularly likely to harbor Salmonella. People should always wash their hands immediately after handling a reptile, even if the reptile is healthy. So 1) you could've had a food handler with unwashed hands or 2) the chicken could have encountered bacteria on the floor from a rodent (remember they said they didn't discard all the chicken that fell on the floor?) User Rank
Blogger NO RATINGS
When I heard about the Doritos Taco Bell shell I think my first reaction was nausea.
User Rank
Blogger NO RATINGS
Dorito shell taco's look like gourmet fare compared to the latest from Taco Bell. This made me quesy all day. I think the mustard drizzle pushed it over the top. Please note: This is only available in the UK. Maybe a nation that enjoys smashed peas -- and beans for breakfast -- also enjoys a hearty pizza?
 User Rank
Blogger NO RATINGS
Oh, and there are other pizzas that make you say "what the hell is that?" now being served in the Middle East. Yes, a hybrid product—half cheeseburger, half pizza.
 User Rank
Blogger NO RATINGS
And even more specialty crusts from Pizza Hut: fried chicken sticks with mozzarella from China; sausage pops from the Philippines; and the special Golden Fortune Cheesy Crown from Malaysia.
We could create a profitable diet scheme just by creating flash cards of these products. Feel hungry? Look at these. Now where's your appetite? Gone? Told you! People would hit their ideal weight in days! User Rank
Platinum NO RATINGS
When my son was taking marketing in college he had to do a project on a "yuck" product and he chose Spam. Spam has an enormous market share in Hawaii and you would not BELIEVE some of the concoctions that are pictured on the Internet!
That Middle East hamburger/pizza hybrid reminds me of one of the pu-pu platter delights on the Spam sites. IN FACT...I know it's late notice, but Spam Jam 2012 will be taking place in Honolulu starting TOMORROW! Wheels up! http://www.spamjamhawaii.com/ User Rank
Platinum NO RATINGS
@ Noreen
LOL...I mean OMG! You are SO jumpstarting my diet! User Rank
Platinum NO RATINGS
Years ago I heard about the Grand Central Station Men's Room Diet. You can eat anything you want in any quantity, but it has to be consumed in the men's room of Grand Central.
Spotted dick in the Grand Central Men's Room? The mind reels! User Rank
Blogger NO RATINGS
@Street Smart,
Drat! I really wanted to go to that. (Truth be told, one of the rare terrible cooks in my family loved spam. And as a kid, before I knew any better, when I went to visit, she would often make me fried spam sandwiches on gummy white bread from A&P. It was just as good as her other speciality: boiled ring bologna. I loved her to death, but she really made me appreciate the cooking of my mom and my surly German grandmother.) User Rank
Platinum NO RATINGS
May she rest in peace, my mother was a terrible cook! Betty on Mad Men is more talented in the kitchen than my mother was!
But the nadir of my mom's haute WASP repertoire...worse than the chop suey...below the Sweet & Sour pork...was a SPAM creation that she used to serve on Sunday nights. She would take hamburger buns, grind up SPAM and add mayo and pickle relish to it; then heap the SPAM onto the open-faced buns and BROIL them so they had a hard crust on top. Even now the thought makes me gag, and of course, we had to eat TWO halves instead of one whole. Then we would eat them on TV trays in front of Lassie, Walt Disney's Wonderful World of Color (in B & W) and Ed Sullivan! User Rank
Blogger NO RATINGS
Ah, simplier -- though far less gourmet -- times, Street Smart!
User Rank
Blogger NO RATINGS
Oh man, has this thread ever taken a turn for the worse....
User Rank
Iron NO RATINGS
Like any good party once you start talking tacos, fried chicken, and pizza, things get out of hand...
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Blogger NO RATINGS
Touche, Joao-Pierre!
 User Rank
Gold NO RATINGS
That's interesting. You get a lot of meat in middle eastern food. Specially beef. Guess they wanted to put more meat in the pizza. The last time I had KFC I felt that the meat was undercooked. But I liked the mashed potatoe you can order instead of the french fries.
User Rank
Platinum NO RATINGS
Yup, that hot dog pizza looks like an acquired taste, all right! But looking at that little hot dog peeking out of the end of the crust I realized that the UK was the perfect place for this concoction because they'll be able to come up with some wonderful double entendre name for it like "bangers and mash" or "toad in the hole."
Every nationality gets the cuisine it deserves! User Rank
Blogger NO RATINGS
@Street Smart,
Like this? I know it's a UK specialty. But it does not sound appealing,   User Rank
Platinum NO RATINGS
Noreen,
The hotdog stuffed crust is nothing. when I was in Thailand last year there was a pizza place that would advertise a sausage crust, tom yum seafood pizza..... User Rank
Platinum NO RATINGS
Pierre,
The kind of market which Yum is in(Food);you have to take into account Local tastes if you want to do really-really well. Sure,having some flavors and tastes that have served you so well in your Home market(the US) works well but you have to customize for local tastes to achieve maximum success. I have seen this on my travels in India,China,Indonesia and in the Middle East. Whatever specific tastes the local population has it is then customized into the Main Menu. Yum Foods don't sell Premium or exotic Food which can be savored as a Delicacy. This is regular day to day food we are talking about here .Which is why companies McDonalds and KFC always do well no matter there is a Recession or there is a Boom going on Worldwide. Regards Ashish. User Rank
Iron NO RATINGS
Do any of you guys think it's possible that slower sales in the fast food industry could have been a result of the initial consumer shock of seeing calorie counts posted for their fave fast food items?
Also, do you think that fast food places should post more nutritional info as well? After all, calorie count can be quite deceiving... User Rank
Platinum NO RATINGS
If not, it should have been. The nutrition information on almost all of the fast foods is terrible.
User Rank
Iron NO RATINGS
@tokyogai, exactly! Not that anyone should be thinking fast food when looking for a healthy option, but even some fast food salads are worse than burgers and fries.
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose. |
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