News
Top 5 QSR stories of 2008
January 7, 2009
For the quick-service restaurant industry in 2008 the most read news items covered the gamut, from the economy to takeovers to systemwide rollouts.
The salmonella St. Paul outbreak was the top news story of the summer, with more than 1,400 people sickened by the bacteria. The Center for Disease Control's advisory to stop eating certain kinds of tomatoes hit the tomato industry with an estimated $100 million loss before tomatoes were cleared for consumption in mid-July.
The Food and Drug Administration investigation never linked the strain to tomatoes but did find traces of the strain on jalapeno and Serrano peppers grown in Mexico. The outbreak ended with no definitive conclusion.
In the aftermath, the FDA is working on improving investigation times and strengthening food safety regulations. The produce industry has said it has made progress toward labeling every case of fruit and vegetables to make it easier to trace tainted food to all points in the supply chain.
Trans fat bans, menu labeling requirements
Health concerns were another hot topic as several brands, including Wendy's and Chick-fil-A, eliminated trans fats from their menus. Several communities, including the state of California, banned trans fats in restaurants.
The number of municipalities requiring menu labeling also grew, and California was the first state
to require chains with 20 or more stores to post calorie counts on their menu boards. As a result, talk is growing for a federal law requiring calorie counts.
Arby's takes on Wendy's
Triarc's acquisition of Wendy's in an all-stock deal worth about $2.34 billion was big news in the industry. Industry observers are hopeful the new Wendy's/Arby's Group will improve Wendy's disappointing performance over the last few years.
Roland C. Smith, former director and CEO of Triarc and CEO of Arby's, now leads the 10,000-plus unit company as president and CEO and is a member of the company's board of directors.
In related news, Trian Partners, a fund managed by members of Wendy's/Arby's board, purchased more than 49 million shares of Wendy's/Arby's Class A common stock to give them a 21.6 percent ownership.
McDonald's takes on Starbucks
The biggest menu story of the year was McDonald's rollout of its McCafe specialty hot beverage line. As creditors tightened their lending requirements, industry analysts wonderedif franchisees, who spent about $100,000 to install the McCafe beverage center, would be impacted. McDonald's assuaged the skeptics by stating that the rollout was on track, with nearly 4,000 coffee bars now in place.
Industry observers also wondered if the McCafe line would compete with coffee giant Starbucks. But McDonald's has pulled out the big guns to prove it is a competitor with billboard ads aimed at Starbucks with statements like "four bucks is dumb."
Recession affects sales
The economy caused restaurant sales to decline month after month, with the National Restaurant Association reporting 13 consecutive monthsof its Restaurant Performance Index standing below 100. In December, the news was even more grim as the association's comprehensive index of restaurant activity fell to a record low.
QSR operators are bracing for a bumpy 2009 by focusing on value, something consumers are searching for.
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