With two months remaining in 2018 it is probably too soon to pick the top story for the year. Besides one of top candidates — the Papa John’s saga — continues to play itself out. One story worthy of consideration, though, is the Russian pizza tattoo promotion.
On August 31, the Domino’s franchisee in Russia announced what seemed like a simple deal at the time. Fans of the pizza chain were invited to post on social media a photo of a tattoo of the Domino’s logo with the hashtag #dominosforever. While the tattoo had to be in a visible location, the incentive was generous. Those who got the tattoo and posted it would receive 100 free pizzas of any size per year for 100 years.
Some applicants kept it simple with a small tattoo of the logo while others had larger and more elaborate designs. In any case, Domino’s tattoos started appearing by the dozen and the pizza company realized they had a problem. The franchisee updated the terms of the contest on Sept. 3. Some of the highlights include limiting the prize to the first 350 people, the tattoo had to be at least 2 centimeters in size and the award would be 100 medium size pizzas for a year. The next morning the company posted a large stop sign ending the promotion. Domino’s later said that 381 people qualified for the free pizza.
One young lady who did get the tattoo and the prize guessed that a million people would have qualified if the promotion ran its full course.
Economic News This Week
- The advance estimate for the third quarter U.S. Gross Domestic Product was 3.5 percent according to the Bureau of Economic Analysis. The estimate slightly exceeded most forecasts. In the last 4 quarters GDP has been up 3.0 percent, which is well above the 2.3 percent growth in the previous year, the Bureau notes.
- Initial-jobless claims climbed 5,000 to a level of 215,000 for the week-ending Oct. 20. The 4-week moving average was unchanged from the previous week at 211,750 claims.
- New orders for manufactured durable goods increased 0.8 percent in September according to the U.S. Census Bureau’s advance report for the month. Excluding transportation, new orders increased 0.1 percent. Shipments of manufactured durable goods rose 1.3 percent.
- Sales of new single-family homes totaled 553,000 in September on a seasonally adjusted annual basis. This is 5.5 percent below the August rate and 13.2
- The University of Michigan Index of Consumer Sentiment drifted lower in October. In the final report for the month the index hit 98.6, down from 100.1 in September. The Current Economic Conditions Index was 113.1 in October, down from 115.2 in September. The Index of Consumer Expectations also so dropped slightly to 89.3 from the September reading of 90.5. A spokesman for the university pointed out that the average for the overall index is 98.5 for the year.
Foodservice News This Week
- Uber plans to launch food delivery with drones in as little as three years. The Wall Street Journal reported the company’s Uber Eats division plans to hire an executive to develop such a program. The article also stated that if Uber Eats was a separate company, its estimated market valuation would be $20 billion.
- Study shows mixed results for Seattle’s $15 an hour minimum wage. Research by the University of Washington found the increase added about $10 a week to the average low-income workers wages. More experienced workers added $19 per week partly by making up lost hours in Seattle at second jobs outside city limits.
- System-wide same-store sales increased 4.2 percent in McDonald’s third fiscal quarter of 2018. The burger giant reported positive comps across all sectors, including U.S. stores, which were up 2.4 percent. McD’s attributes the positive comp results to price increases, not growth in customer traffic. McDonald’s CEO stated that the chain will attempt “to do better at breakfast.” Net income declined by 13 percent from the third quarter of 2017. Total revenue fell 6.7 percent as a result of selling off company-owned stores to franchisees.
- Burger King unveils a new restaurant design hoping to reverse sluggish sales. Called the “Garden Grill,” the new approach strives to create a more “upmarket” ambience with warm wooden tables, plants and ordering kiosks.
- The Speedway c-store chain will expand its Enon, Ohio, headquarters. Reports say that the proposed 140,000-square-foot expansion will cost in excess of $40 million. In seeking tax abatement from local government, Speedway said the company plans to hire an additional 200 employees.
- Corporate Stirrings: Bloomin’ Brands independent board members received a letter from Barrington Capital urging the chain to sell one or more of their brands. (Outback was not included.) The letter received a cool response from the Bloomin’ board which gave the current management team a vote of confidence.
- Growth Chains: Denny’s announced two major expansion agreements, one with the Denny’s franchisee in Canada to add more than 30 additional restaurants and another agreement with Denny’s franchisee in the Philippines to open 20 additional restaurants. Dickey’s Barbecue Pit will expand into Canada with 20 locations planned for 2019. Teriyaki Madness will open the chain’s first restaurant in Hawaii and plans to open several more. Pupatella Pizza received an investment of $3.75 million which the chain will use to open 8 units in the Washington, D.C., area.
- Comparable Store Sales Reports: Baskin-Robins up 1.8 percent, Burger King down 0.7 percent, Chipotle Mexican Grill up 4.4 percent, Domino’s Pizza (U.S. System up 6.3 percent, Company Owned up 4.9 percent and Franchised up 6.4 percent), Dunkin’ up 1.3 percent, McDonald’s up 2.4 percent, Noodles & Company (System up 5.5 percent, Company Owned up 5.2 percent and Franchised up 7.6 percent), Popeyes Louisiana Kitchen down 0.2 percent and Tim Hortons up 0.6 percent.
For details and same-store sales of other chains, please click here for the Green Sheet.