Retailers, consumers and prices
Check out Burger King agreeing to be bought for $3.26 billion.
Burger King is letting itself be bought out by the relatively unknown New York-based private equity firm, 3G Capital, for $3.26 billion, or $24 per share, net of debt.
That is a Whopper (sorry, we couldn’t resist) of a premium – 46 percent – over Burger King’s stock price earlier this week, before all this buyout chatter started.
The price did indeed strike some analysts as rich, considering how poorly Burger King has done compared to “Golden Archrival” McDonald’s in recent years.
Stifel Nicolaus’ Steve West said on Wednesday $23 would be enough for shareholders and Burger King’s current private equity owners, TPG Capital, Goldman Sachs Capital Partners and Bain Capital Investors. And Deutsche Bank’s Jason West said a price as low as $19 or $20 could make sense.
Here’s another reason to love L.A.
The city’s downtown business district is home to the only Carl’s Jr restaurants that serve beer.
“We market to the young, hungry male. He’s also thirsty,” said Julie McLean, a spokeswoman for the chain, which has used controversial celebrities like Paris Hilton to push its generously-portioned, indulgent hamburgers.
Starbucks’ drive thru menus are getting a facelift — as the cafe chain takes a page from the fast-food industry’s playbook.
At the end of August, the menu boards at Starbucks’ 2,600-plus drive thrus in the United States and Canada will have more pictures and fewer words. Fast-food chains like McDonald’s, which has been going after the Seattle coffee company’s core business with espresso drinks, frappes and smoothies, commonly use simple, photo-based menus to tempt diners.
Starbucks will begin testing summer drinks with a base of green, unroasted coffee in San Diego today as it works on new products to drive sales and put more distance between itself and rivals like McDonald’s — which is rolling out the kinds of drinks that Starbucks built its business on.
The drinks, called “Refreshers,” will be offered in cool lime and very berry hibiscus flavors. They are made with fruit and are low in calories and caffeine, said Julie Felss Masino, Starbucks’ vice president of global beverage.
Check out a bullish view on McDonald’s June same-store sales.
Janney Montgomery Scott analyst Mark Kalinowski raised his forecast for U.S. same-store sales at the hamburger chain to an increase of 4.6 percent from an increase of 2.4 percent.
His revised forecast is based on his survey of 30 McDonald’s franchisees, representing 215 restaurants.
Papa John’s and Olive Garden got top marks in their respective restaurant categories in the University of Michigan’s 2010 American Customer Satisfaction Index, while McDonald’s and Chili’s Grill & Bar were laggards.
Papa John’s took the lead in the limited-service category from Domino’s Pizza. Notably, this year’s win for Papa John’s came as Domino’s was getting a sales bump from its reformulated pizza recipe and crowing about how its new pies were beating rivals in taste tests.
Check out the weak euro’s latest victim.
McDonald’s reported better-than-expected global sales in May at stores open at least 13 months, but warned that full-year profits would be hit by unfavorable currency exchange rates, specifically calling out the euro.
The No. 1 hamburger chain gets about one quarter of its operating income from the euro zone, and that region will result in foreign exchange rates hurting the full-year profit instead of being slightly positive as it previously forecast. However, the company said that issue would not affect second-quarter results and the European stores posted far stronger-than-expected May sales, so the real impact of the weak euro is still to come.
Check out how the McCafe keeps perking up McDonald’s sales.
Last month, Ronald McDonald and company reported a strong first-quarter profit, showing that their bet on taking on Starbucks on its home turf has paid off. And judging from McDonald’s April sales, that McCafe business — with its expanded lower-priced roster of coffees and new frappes — continues to caffeinate its results.
In April, sales at restaurants open at least 13 months (same-store sales, in the industry’s shorthand) were up 3.8 percent stateside, and did even better overseas, for a global average of 4.9 percent.
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Check out McDonald’s overseas boost.
February sales at McDonald’s restaurants open at least 13 months rose 4.8 percent, even though such sales rose just 0.6 percent in the United States.
The world’s biggest hamburger chain attributed some of the gain to Chinese New Year celebrations. Same-store sales jumped 10.5 percent in the Asia/Pacific, Middle East and Africa (APMEA) region.