Sunday, November 8, 2009

Brinker and Darden trapped in a Branding Conundrum of there own making.

What are your customers shopping for and where? One of the things that happens when a restaurant brand becomes complacent is consumers reduce the frequency of visits. What are the signs of a brand becoming sick? What role does brand protectionism play in the restaurant industry? When brand managers and C-level executives utilize justification and rationalization to explain results you know that what they did, didn’t work.

Brand Managers understand that consumers are dynamic not static. Brands must be dynamic as well. When brands play the wait and see game, the only thing they are truly waiting for is the customer to walk into the store. The problem is it just happens less and less. Focusing on price rather than product and product innovation continues to stifle many a foodservice company.

These are difficult times or so we are told. However brands that succeed are bold and truly changing the way they do business. Example: Apple (APPL) and Amazon (AMZN) both have new products both have products that are innovative and cost more than previous ilk products and both companies are booming! Apple set an all-time single-quarter sales record with its Macintosh computers, selling 3.05 million units, accounting for $3.95 billion, or 40% of sales. Apple finished the year just short of the 13 million unit mark for the fiscal year, an improvement over the prior year of nearly 3.3 million units. Amazon can not keep up with production of it’s Kindle which “ has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on " a spokesperson said.

Brinker International (EAT), which reported first-quarter results Tuesday and owns 1,700 restaurants, most of them Chili's Grill & Bars, said ‘customer traffic fell for the 21st consecutive quarter’. That is over five years just in case anyone missed it! It might be time for some outside eyes or ideations!

Food is not out of favor or flavor! What is out is a style of management mediocrity and compliancy. A brand is a promise that must be on-going dynamic and consumer relevant. The value of the brand is a result from interactive between contemporary relevance of the brand and the consumer. Success leaves clues and we can just look at Chipotle Mexican Grill Inc.(CMG) posted double-digit increases in sales and profit for the third quarter on new restaurant openings, menu price increases, and labor and other operating efficiencies

When profit from cigarettes began to decline as a profit generator the vast majority of convenience store channel operators focused on fresh food. Now prepared fresh food is the highest margin and fastest growing sector of there business units. Grocerant prepared food is booming across all channels, Restaurant, Supermarket, Convenience Stores, Dollar Stores, Kiosk and Mobile Trucks. What path is your company on are you following the same course as EAT or are you growing both your brand and your niche! Many companies are doing the latter in the food industry.

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