Walmart, U.S. Restaurants Feel the Pinch of a Consumer Spending Slowdown

Posted by Dale Buss on February 21, 2013 09:58 AM

In their on-again, off-again love affair with spending, the American consumer may just have hit the "off" switch again. Both Walmart and America's National Restaurant Association are warning about remarkable dropoffs in the trend for consumer spending over the last few weeks, with few prospects for improvement anytime soon.

And on Thursday morning, Walmart reaffirmed its alarm in a financial report that predicts flat same-store sales in the U.S. for the first quarter.

The latest revelation was that U.S. restaurant same-store sales rose much less in January than in December due to a pullback by consumers, according to a restaurant operator survey authorized by the NRA. The trend was worse for full-service restaurants than for quick-serve businesses, but the overall 1.1 percent rise for the month (versus a year earlier) compared with a 2.4 percent increase for December prompted alarm bells to go off.

"Operators are unsure of what the cause of the slowdown was," said Larry Miller, restaurant securities analyst at RBC Capital Markets and creator of the NRA's monthly survey, according to "They cited a laundry list of reasons, including weather, holiday shifts, gas prices and tax-refund delays."Continue reading...

brand wars

As Cracker Barrel Moves to Extend Its Brand, Kraft Says: Hold the Cheese

Posted by Dale Buss on February 5, 2013 04:55 PM

Kraft is moving to prevent Cracker Barrel restaurants from extending its store brand into American supermarkets, where Kraft's Cracker Barrel cheese brand has been a major player since 1954.

There was seemingly no big threat to Kraft or to its Cracker Barrel cheese trademark when Lebanon, Tenn.-based Cracker Barrel Old Country Store sold merely a few grocery items under the Cracker Barrel name at small general stores attached to most of its 600-some U.S. restaurants.

But now that Cracker Barrel has struck a major licensing agreement with the John Morrell Food Group to sell Cracker Barrel-branded food products through grocers and mass merchandisers, Kraft says it is concerned that the restaurant chain's brand expansion could create confusion among consumers — and thereby damage the Kraft line.Continue reading...

chew on this

McDonald's Brand Strength Keeps Its U.S. Customers Coming Back for More

Posted by Dale Buss on January 21, 2013 10:31 AM

It's like staying up too late, watching Jerry Springer or not being nice to your mother: Many Americans don’t exactly feel good about visiting McDonald’s after they’ve done so, but they’re more than likely to do it again.

That’s one interesting conclusion from the latest survey by Consumer Edge Insight of Americans’ ratings of the biggest fast-food brands and the various attributes of their visits to the QSR chains.

McDonald’s placed No. 1 in the firm's latest poll in the category of "good value," with 57 percent. Subway earned 53 percent, and Taco Bell posted 48 percent.

David Decker, president of the research firm, commented on what factors made the grade:Continue reading...

design watch

Hooters, at 30, Nudges Its Decor Slightly Out of the Man-Cave

Posted by Mark J. Miller on January 17, 2013 03:38 PM

Hooters isn’t exactly known for the look of its interior decor. The brand is largely connected to its young, attractive waitresses serving hot wings and beer.

However, Hooters has been in business for 30 years now — and some of the locations have been getting a little long in the tooth.  The chain announced a physical revamp Thursday in an effort to remake itself into a slightly more upmarket brand. The changes were first introduced at a Houston, Texas, location.

“The high exposed ceiling, painted ductwork and cypress wood walls give a more open and brighter appearance, and materials such as light colored face brick provide texture throughout the space,” according to a press release. “Guests will also benefit from a more centrally located and prominently placed bar, complemented with swiveled bar stools for ease and comfort.”Continue reading...

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Five Guys is Expanding to the UK

Posted by Mark J. Miller on November 26, 2012 12:21 PM

In-N-Out Burger caused a "frenzy" last month when it popped up with a stealth five-hour pop-up in London. Now Five Guys, the US burger chain so-named in honor of the male half of the founding couple and their four sons, is about to make its first foray out of North America and into the UK, and it's planning to stick around a little longer.

The word from UK's Marketing magazine is that Five Guys, which has a thousand locations in the U.S. and Canada, is expanding to the UK thanks to a deal that Five Guys has made with Sir Charles Dunstone, the founder of Carphone Warehouse.

The plan is for Dunstone to open a few Five Guys in the UK next year with the first of them being a flagship store in London. And no, Barack Obama's beloved Five Guys won't rebrand as "Five Chaps" for its UK arrival, and we doubt they'll start calling their menu's mainstay "burgers and chips."Continue reading...

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McDonald's Explains How French Fries are Made

Posted by Shirley Brady on October 19, 2012 12:12 PM

The latest in the McDonald's Canada transparency campaign, which answers customer queries with videos posted on its YouTube channel, reveals the journey of the McDonald's French fry. The fast food giant's latest earnings report indicates that brand needs to regain global momentum.

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McDonald's Is Not McRibbin' Around With Limited-Time Menu Promotions

Posted by Dale Buss on September 20, 2012 06:24 PM

McDonald's recent emphasis on limited-time menu offerings not only is attracting customers to come in for their favorite menu items before they disappear for at least a little while. The promotional strategy is helping McDonald's quickly generate traffic for new "value" menu items in the U.S., Europe and elsewhere.

Analyst Jeffrey Bernstein of Barclays Capital sees emphasizing more low-priced menu items and platforms in both European and U.S. markets where many consumers are struggling financially as a smart way to meet immediate financial concerns while introducing them to non-value menu items. It's a classic sales strategy — get their nose in the tent — that's paying off handsomely for McD's.

"After the introduction of value platforms, customers will often heavily use the value menu based on the perception that the platform is short-term in nature and will soon no longer be an option," he wrote, according to Nation's Restaurant News. "Once customers realize the value emphasis is longer-term in nature, they increasingly use other portions of the menu, helping in the recovery of both the average check and restaurant margin."Continue reading...

sip on this

Green Mountain Scaled by Starbucks in Single-Serve Coffee Battle

Posted by Dale Buss on September 20, 2012 10:01 AM

Green Mountain Coffee is in a pot of trouble. And that's even before Starbucks introduces Verismo, its own single-serve brewing system for consumers that's rolling out in October (and already available on, to challenge the iconic K-Cup system by Green Mountain that features its Keurig pods. 

The brand has been a darling of consumers for several years, on a continued growth tear as K-Cups led a revolution in how Americans consume much of their coffee by making the single-serve system de rigeur in homes and offices. The company fed strong double-digit sales growth by continuing to proliferate the types of pods, to include "iced" drinks and juices as well as coffees and teas.

Green Mountain also had been a darling of investors seeking to cash in on a boom that, for the six years after the Vermont-based company acquired Keurig, managed to thrive without attracting the competitive interest of Starbucks.Continue reading...

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