Brian Numainville’s Post

Eighties and nineties nostalgia was dealt a gut punch earlier this month when nearly 100 Red Lobster locations abruptly went dark amid the company’s Chapter 11 bankruptcy filing. Restaurants that took the U.S. by storm 30 to 40 years ago are beginning to drop like flies after a whirlwind past few years that forced rapid innovation in response to evolving consumer demands. At least 12 of the nation’s biggest casual chains plan to scale back their portfolios this year, and while reasons behind the reductions vary, the potential real estate impacts grow more layered as closures bloom. The turnover of space is expected to create opportunities in retail markets where rapid population growth has led to historically low levels of vacancy. But in less desirable markets, the empty carcasses of once-beloved chain restaurants will be harder to reckon with. Around 300 Applebee’s locations have closed since 2017, with up to 35 more planned for this year. TGI Friday’s announced the closure of 36 underperforming restaurants in January, and while rumors of Chilis’ demise have proven untrue, the chain did throw in the towel on 16 struggling branches in 2023.There are 311 casual restaurant locations on the market nationwide.People aren’t looking for legacy brands. They are looking for smaller, independent, newer concepts to create excitement. The good news from a commercial real estate perspective is there is an acute shortage of second-generation restaurant spaces. There will be a number of tenants eager to backfill the spaces. #cre #commercialrealestate #Commercialrealestateadviser #commercialproperty #retailrealestate

Crumbl Cookies' strategy to upscale its store sizes and menu could be a recipe for trouble. As the chain grows, the higher costs of larger, more luxurious locations and added menu items are beginning to weigh heavily, mirroring the pitfalls Boston Market faced years ago. How Crumbl is handling these challenges and what it means for their future? https://lnkd.in/ewDHnCeg #foodnews #foodbusiness #foodservice #foodindustry #businessstrategy

Crumbl Cookies' strategy to upscale its store sizes and menu could be a recipe for trouble. As the chain grows, the higher costs of larger, more luxurious locations and added menu items are beginning to weigh heavily, mirroring the pitfalls Boston Market faced years ago. How Crumbl is handling these challenges and what it means for their future? https://lnkd.in/ewDHnCeg #foodnews #foodbusiness #foodservice #foodindustry #businessstrategy

CNN — Cracker Barrel CEO Julie Felss Masino recently gave a devastatingly frank assessment of the brand: “We’re just not as relevant as we once were.” Masino, who became CEO in July, laid out the diagnosis — and the remedies — in a May presentation to analysts. And it raises questions for those accustomed to the brand’s biscuits and gravy, wooden tables and chairs, brain puzzler games and front porch rocking chairs. “The way we communicate, the things on the menu, the way the stores look and feel … all of these things came up time and time again in our research as opportunities for us to really regain relevancy,” she said. The revamped Cracker Barrel Old Country Store (the brand’s full name) could include remodeled restaurants with bookcases instead of lattice dividers and brand new banquette seating. New Cracker Barrels might be smaller restaurants altogether, with menus that include new items like green chili cornbread and banana pudding. Customers may see brighter interiors with simpler decor, a move away from the typical cozy clutter. Those changes are still just being tested. One new thing happening now? Discounted dinner from 4 to 6 p.m. Why would Cracker Barrel, so desperate for relevancy, lean into a tactic typically used to attract senior citizens? Partially because many people are eating early these days. And partially because it’s looking for a quick fix. Cracker Barrel, which first opened in 1969, has long billed itself as a roadside place where weary travelers can stop for a hearty meal in a homey dining room, and also pick from a large selection of knick knacks at its country store. That pitch, which has in the past largely appealed to Baby Boomers, hasn’t resonated very well since the pandemic. Last year, when other diners returned to restaurants after the early pandemic years, Cracker Barrel’s older clientele remained cautious, visiting the chain less often. Now, its retail stores are taking a hit as consumers pull back on spending. Those same dynamics are playing out in its restaurants. In the three months ended on April 26, Cracker Barrel’s total revenue fell 1.9% compared to the year before, the company reported Thursday. Retail sales at stores open at least 18 months fell 3.8%, while restaurant sales fell 1.5%. Wall Street has not been impressed: The company’s stock has declined nearly 37% this year, and has plunged about 70% over the past five years. The Tennessee-based chain owns its roughly 660 locations, which can be found throughout the country.

Have you eaten at CAVA? (It's delicious!) The Mediterranean chain is giving fast-casual restaurants a run for their money. I'm sharing more insights in my latest Forbes article. https://lnkd.in/gjEFA4Ka #cava #restaurantindustry #restaurantbusiness #restaurant #marketing #qsr #fastcasual

Is the rise of co-branded restaurants here to stay? Fatburger's recent move to co-brand with Round Table Pizza serves as the latest example of the resurgence of co-branded locations in the restaurant industry. This trend isn't just about offering multiple menu options under one roof—it's a strategic response to a myriad of challenges faced by businesses, including fluctuating customer traffic, labor constraints, supply chain complexities, and limited real estate opportunities. In this landscape, Companies like Dine Brands are exploring joint IHOP and Applebee's concepts in the U.S., inspired by successful overseas models. Focus Brands, with Auntie Anne's, Carvel, Cinnabon, Jamba, McAlister's Deli, Moe's Southwest Grill, and Schlotzsky's under its belt, has expanded with over 175 dual-branded locations, with more growth planned. Advantages of such collaborations include shared rental costs, enhanced real estate and investment options for franchisees, shared back-of-house facilities, cross-training opportunities for employees, and increased menu diversity for customers. Yet, the success of these collaborations hinges on more than just convenient cohabitation. It requires careful integration of technology systems, optimization of store footprints, and a deep understanding of both customer preferences and operational dynamics. The Dunkin' and Baskin-Robbins partnership exemplifies this synergy, leveraging synchronized seasonal sales and peak hour harmonization to drive profitability. Navigating the landscape of co-branded restaurants can become even more challenging with shifts in ownership within the industry. Darden Restaurants, for instance, grappled with this issue in 2015 when it closed its Red Lobster/Olive Garden co-branded stores while trying to divest the Red Lobster brand from its portfolio. How do you anticipate the reemergence of co-branding will shape the industry? Reach out to us if you’re interested in more restaurant news. Vincent Knipp 📞 (972) 755-5205 ✉️ Vincent.Knipp@marcusmillichap.com Andy Cepeda 📞 (972) 755-5138 ✉️Andy.Cepeda@marcusmillichap.com 👉 Click link for details: https://lnkd.in/gHCz2bN5 #NNN #retail #realestate #investment #investing #commercialrealestate #property #passiveincome #cre #investor #realestateinvesting #commercialproperty #netlease #retailrealestate #fatburger #roundtablepizza #fatbrands

Change is afoot and venerable Market Hall Foods is, sadly, not immune as they close their Berkeley location while keeping Rockridge in Oakland open. These are tough but necessary choices that reflect the push and pull of increasing cost and uncertain demand. This follows recent closures across the country including Foxtrot and Dom's Kitchen & Market. Folks often lament these closures and posit what they believe to be the issues driving the moves, but the below article lays in stark relief some of the commonalities that thread through the industry as it hits some inevitable bumps. Contrary to what we have all long believed, more and bigger is not always better, and there is no shame in taking three stores to two, or two to one, if it means that the core business model and consumer value proposition can remain viable and healthy, if not compelling. Let's patronize our specialty retailers and be intentional about supporting not only them, but the smaller producers they feature that are vital to our food and beverage ecosphere! #retail #retailclosing #specialtyfood #retailtrends #supportsmallbusiness

As a food entrepreneur and closet marketeer, I see challenges with this partnership: 1. Krispy Kreme donuts are best served warm. Their red neon light created a cult like following. But when they over expanded years ago into gas stations and c stores the light wasn’t shining anymore. At that point they became just another donut and cheapend their brand. 2. It will be a gargantuan, if not impossible task to service all 13,000+ McDonald's restaurants with a “fresh” donut. I watch it everyday here in the Northeast as they try to supply local supermarkets with fresh donuts. Nobody is thinking about donuts in the afternoon or at dinner time - the window is 7am to 9am. This means a “thaw and sell” donut will have to be developed for this partnership to even have a chance of survival. But again, it goes against what KK is known for. 3. McDonald's is arguably one of the most recognized brands in the world. However, they’ve come under fire recently for their pricing and customer service. I’d double down my resources right there. Focus on making the customers feel special when they walk in the door and give them a meal that provides value - as they created the “value meal” concept. The introduction of donuts might grow their TikTok followers, but it won’t add to the bottom line. Save that dough. PIE THAT BRINGS PEOPLE TOGETHER®️ #qsr #cpg #fastfood #dessert #marketing #mrtods #entrepreneurship

Cava is worth Double Chipotle Per Location!! This really blew my mind to see that the current valuation of Cava equates to $35mm per location, versus Chipotle at $20mm, and ShakeShack at $8mm. Obviously a lot of this is based on the fact that Cava has a lot of room to run on new store openings, but it still is a shocking statistic! #FoodIndustry #Valuation #BusinessInsights #Retail #CommercialRealEstate #NetLease

Very well done and right on point, Alicia Kelso as usual. I've been thinking about the standout brands--the Chipotle's, the Dutch Bros, the CAVA's and the handful of others that we have seen in this quarter and the last several. It seems to be these brands are viewed by their guests as "cool". Cool guests attract more guests and crew members (look at the line at CAVA at 900p)....that drives the store economics that drives the best real estate interest and best locations and deals. That then drives Wall Street interest, IPOs and valuation. That then partially at least drives great executives, great compensation programs and creation of the best "reward cultures" So as always, everything relates to everything else, but the coolness factor is very important in our business. What to do? Clearly we in the industry need to devote much more time studying the DNA and operations/culture/store economics of the standouts. Clearly we are all not a Chipotle. But there are common lessons learnable.