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JULY 2008 - Is the economy affecting restaurants?

GROWTH DURING HARSH ECONOMIC TIMES
Even under hard economic times a few public restaurant chains have reported positive single percentage points in comparison to 2007 numbers. What exactly are these chains doing differently? It could be their menu offerings or it could be that they all seem to focus heavily on kids and families. Something to consider.
- Olive Garden: + 5.7%
- Burger King: + 5.4%
- Buffalo WildWings: + 4.1%
- Red Robin: + 3.9%
- Panera Bread: + 3.3%

BURGER KING INTRODUCES A NUTRITIOUS KIDS’ MEAL
Items included are Kraft Macaroni and Cheese, Fresh Apple Fries with lowfat caramel dipping sauce and Hershey’s 1% fat white milk. The meal is said to contain only 350 calories and retails for US$ 3.49

DENNY’S OFFERES A TO-GO BREAKFAST SERVICE
B-fast 2go packaged meals are now offered by Denny’s – these come in a plastic container designed to keep meals warm and fresh for up to half hour in between destinations. National TV ads, in-store advertising and website marketing will support the launch of the offering.

DOMINO’S PIZZA MAY DELIVER MOVIE RENTALS
There is discussion with MOD Systems to offer such service. If the program is put in place, Domino’s clients would be able to order a pizza and a movie of their choice for home delivery.

PIZZA HUT LAUNCHES TV AD IN SPANISH TO PROMOTE TUSCANI PASTAS
Cooking show filmed in Mexico City features a cooking-show audience who are made to believe they are about to sample the creations of a 5-star restaurant chef, only to discover they are eating pasta from Pizza Hut (is this a Hardee’s hamburger total knock off?)...

STARBUCKS INCREASES THE NUMBER OF US STORES TO CLOSE BY 600 AND SCALES BACK ON NEW OPENINGS
The coffee chain also cut domestic growth plans by 50% and might slash 7% of its workforce. Starbucks originally announced they would close 100 stores earlier this year, but added 500 more underperforming locations to the list. An estimated 12,000 employees are expected to de displaced. In addition, the company has began testing several promotions in different locations in order to increase sales.

AU BON PAIN EXPANDS TO INDIA
Menus in India are expected to feature a line of vegetarian sandwiches as well as a variety of other items. Au Bon Pain currently has international locations open or under development in Kuwait, South Korea, Taiwan and Thailand.

CARL’S JR PLANS TO OPEN AT LEAST 100 RESTAURANTS IN CHINA OVER THE NEXT EIGHT YEARS
Following the big chain trends, CKE Restaurants Inc, will grant franchise rights in Beijing, Shanghai and Tiajin, as well as Zhejiang and Jiangsu. CKE currently franchises 294 international units of Hardee’s and Carl’s Jr. In addition, Hardee’s has signed agreements to open 25 units in Pakistan over the next 5 years.

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