Pizza Hut's Very Scary Special Offering
Chipotle revenue rises in Q3, Instacart sales slip, parking hurts business
We’ve just about made it to the weekend before Halloween, so we’ve got an interesting delivery offer that’s worth putting on your mad scientist lab coat to examine. And on a more serious note, Chipotle put out its Q3, Second Measure has the data on Instacart and a new study shows that parking is bad for business.
This week’s edition is brought to you by Cambridge Mobile Telematics.
Today:
Ghost Pizza Scares Up App Downloads
Chipotle Sales Rise 11.3% in Q3
Chart Time | Instacart’s Slippery Sales
More Parking = Less Business
PROMOS | Pizza Hut’s Ghostly Storytelling Pizza
Pizza Hut Taiwan has cooked up a particularly novel new promotion: the LTO "Ghost Rice Noodle Roll and Phoenix Claw Pizza." Timed for Halloween, the dish features Hong Kong-style barbecue pork rice noodle rolls as ghosts and smoked chicken feet as claws reaching out from the grave. For good measure, the pizza is topped with Korean-style spicy sauces. The pie is available from October 24th to 30th via mobile app, with in-store purchases starting on the 30th.
The Big Picture: Like any good promo, this is all about driving customers towards a brand’s first party app. In this case, it’s the PK Dual Food Card-Pizza Hut x KFC Mobile Membership Card — which mixes Pizza Hut with fellow Yum Brands’ member KFC (sadly there are no Taco Bells in Taiwan.) This promo goes even further to incentivize app use, as each pizza box will come with a QR code that, once scanned, tells the purchasers a spoooooky ghost story. This may sound like an awful lot of work to adapt to your own business, but evidently it’s worked for Pizza Hut: last year they did a similar promo with a spiderweb and eyeball-themed pie.
PARTNER | Save Money and Make Drivers Safer
Auto insurance is the top expense for rideshare companies. Last year, Lyft attributed 90% of its $730M cost of revenue increase to insurance. One insurance carrier doubled its annual premium written for Uber.
To help reduce insurance costs, companies are turning to telematics. They’re making drivers safer through real-time feedback. They’re also rewarding their safest drivers.
FINANCE | Chipotle Sales Up 11.3% in Q3
Newport Beach-based Chipotle released its third quarter financial results and the fast casual Mexican chain is firing on all cylinders. Total revenue increased 11.3% year over year to $2.5 billion; comparable restaurant sales increased 5.0%; operating margin was 16.0%, an increase from 15.1%; restaurant level operating margin was 26.3%, an increase of one percentage point. In the third quarter, the chain opened 62 new locations, with 54 of those restaurants featuring its innovative Chipotlane.
The Big Picture: In general Chipotle is worth following, as its been a real leader in the transition to digital ordering and delivery: digital sales represent 36.6% of total food and beverage revenue, down marginally from Q2. Delivery service revenue, comprised of delivery and related service fees charged to customers on sales made through Chipotle’s app and website, grew 0.6% YoY to $15.9M. Chipotle has really built delivery-optimization into its business processes: ensuring its stores have mobile order / delivery optimized Chipotlane pickup zones, testing robotic prep systems like Hyphen to speed up online orders, even going so far as to invent an automatic guacamole maker to ensure its time-sensitive fans never have to wait too long for some smooshed avocado.
CHART TIME | Instacart’s Sales Slip
You know we’re always game for a new Second Measure chart! This one indexes sales from recently-public Instacart, noting that as of August they were down 2% year over year, but still up tremendously compared to pre-pandemic. In Q2, the tech company’s QoQ customer retention rate was 61%, compared to 77% at Kroger, 71% at Publix, 66% at Albertsons & Aldi and 56% at Whole Foods.
POLICY | Street-Front Parking Hurts Retail / Restaurant Sales
We started today’s edition off with some very lighthearted news, so we’re going to end it with the opposite: a fresh research paper! “Impacts of parking and accessibility on retail-oriented city centres” studied 400 retail rental offers and found that the increased presence of on-street parking was a negative for businesses, while those landlords in areas with more diverse street uses were the ones able to charge higher rents. Also captured in the study is the not shocking news that the pandemic decreased the premium for central city locations.
The Big Picture: Here’s how the authors put it: “Results of a spatial regression indicate that public transport stops, pedestrian zones, and public parking garages nearby increase the attractiveness of retail locations. On the contrary, much on-street parking capacity in the immediate vicinity reduces retail rents.” The findings don’t call for an all-out war on cars, instead finding that optimally sufficient parking capacity is accessible within a comfortable walking distance, perhaps in a multi-story structure. This frees the space directly in front of the business for more productive uses like outdoor dining, greenery, and of course delivery pickup / dropoff zones.
A Few Good Links
FAT Brands sees revenue up 6%, net loss increase 1% in Q3. NLRB ruling puts franchisors on the hook for mistreatment of employees. Cruise temporarily suspends all AV operations. Checking in with Cousins Maine Lobster. Teamsters and Rideshare Drivers United partner. Boston Delivers pushes delivery via ebike.
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