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Restaurants in November had best performance in five months

Kitchen
Restaurants in November turned in their best performance in five months and are looking forward to solid sales and a better economy in 2012, according to a major trade group.

A monthly performance index calculated by the National Restaurant Assn. hit 100.6 in November, up 0.6% from October and the highest level in nearly half a year. Any level above 100 signifies growth.

More customers visited eateries during the month, leading to the strongest net sales in more than four years at establishments open more than a year. The trade group’s current situation index rose 0.8% from October to 100.2 last month.

And restaurant operators are feeling more optimistic, pushing the expectations index up 0.4% to 100.9 in its third consecutive monthly gain. Nearly half said they plan to buy equipment, expand or remodel within the next six months.

But come Sunday, the industry will start facing some changes.

Health inspectors across California will begin to enforce a state law that requires about 900,000 restaurant workers that prepare, serve or store food to hold a food handler card. Employees must complete food safety training and pass a test to earn the card, according to the California Restaurant Assn.

Meanwhile, the National Restaurant Assn. is opposing a new program set to launch next month in which the Internet Corp. for Assigned Names and Numbers, or ICANN, will begin accepting applications for new Internet domain names.

The restaurant association claims that eateries will be forced to spend at least $185,000 each protecting their brands and trademarks. 

“For our largest restaurant-member brands, the price tag is exorbitant,” said Scott DeFife, the association’s executive vice president of policy and government affairs, in a statement. “For the hundreds of thousands of smaller restaurant operators who depend on the Internet to communicate with guests, the costs and confusion could be insurmountable.”

RELATED:

ICANN approves open Web domain name rules: .anything is possible

Restaurant predictions for 2012: Popcorn, pine needles, smartphones

-- Tiffany Hsu

Photo: Anne Cusack / Los Angeles Times

Butterball turkey plant raided on animal cruelty concerns [Updated]

Turkey
North Carolina officials raided a Butterball turkey facility Thursday looking for signs of animal cruelty, according to an animal advocacy group that had sent undercover footage of the site to authorities.

The Hoke County Sheriff’s Department obtained a warrant to search Butterball’s turkey semen collection factory in Shannon, N.C., according to Mercy for Animals.

The activist group had collected hidden-camera footage of the location in November and December, which it then forwarded to law enforcement along with a legal complaint against Garner, N.C.-based Butterball. The video is available here.

Mercy for Animals said it found the birds being kicked, stomped on, dragged and beaten at the facility. Some were suffering from bloody open wounds and infections as well as severe feather loss and broken bones, the group claimed.

The company claims to be the largest turkey producer in the country, distributing 20% of products based on the fowl. Butterball could not be reached for comment.

[Updated 12:53 p.m.: Butterball said in a statement Thursday that it is working with county officials about Mercy For Animals’ allegations.

“Butterball has a zero tolerance policy for any mistreatment of our birds or the failure to immediately report mistreatment of our birds by any associates,” the statement said. “We are performing extensive internal and third-party audits as part of our own investigation. Employees found in violation of Butterball’s animal welfare policies will be subject to immediate termination.”]

Last month, Mercy For Animals went after McDonald's egg producer Sparboe with undercover video of poor chicken treatment, causing the fast-food giant to dump the supplier.

RELATED:

Thanksgiving goes gourmet with high-end turkeys

McDonald's cuts egg supplier after undercover animal cruelty video

McDonald's pork provider Smithfield pledges gestation crate phase-out

— Tiffany Hsu

Photo: Larry Beckner / Great Falls Tribune / AP Photo

Wendy's reenters Japan with $16 foie-gras-and-truffle burger

Wendy's is making a high-end reentry into Japan with a $16 burger festooned with foie gras and truffles
Wendy's is making a high-end reentry into Japan with a $16 burger festooned with foie gras and truffles.

The third-largest fast-food chain in the U.S. (potentially soon to supplant Burger King for the No. 2 spot) took a breather from Japan for two years but returned this week to launch a restaurant in a luxury shopping area in Tokyo.

That franchisee developed the luxurious 1,280-yen (about $16.45) sandwich -– the folks at Wendy's corporate offices said they "really don’t have anything to do with it." The goose liver confection won't show up in the U.S. anytime soon -– Wendy's said its most expensive item here is likely a salad or a triple cheeseburger, in the $5-to-$6 range.

Besides, customers in California already have their pick of foie gras sandwiches -- at least before the delicacy is outlawed in the state next year. There's one sandwich for $16 at the Torrance restaurant Buffalo Fire Department, and another -- for $26 -- at RH in West Hollywood.

Wendy's Chief Executive Emil Brolick has said the company will aim to eventually triple its number of foreign restaurants to about 1,000 eateries. Other fast-food giants, including KFC owner Yum Brands, are also looking overseas for growth opportunities.

That's because chains are better able to experiment internationally, according to Nick Setyan, a restaurant industry analyst at Wedbush Securities Inc.

Fast-food chains that are associated with a "get-in, get-out" vibe in the U.S. are considered more high-end and even elite abroad, Setyan said. In many other countries, Pizza Hut is a sit-down casual dining concept and McDonald's is an event destination, he said.

Chains can work their creative magic trying to adapt to cultural preferences among foreign customers, Setyan said. Hence McDonald's Chicken Maharaja Mac in India,  where many residents don't eat beef for religious reasons. KFC sells congee rice porridge in China. Burger King’s recent Russian ads are much more flamboyant than the ingredient-focused equivalents in the U.S.

Fast-food chains are increasingly feeling pressure domestically, especially as a slew of "better burger" fast-casual brands, such as Five Guys and Smashburger, poach customers.

RELATED:

McDonald's gets a French makeover

Fast-casual restaurants gobble up market share

Russian Burger King ad with tattoos, unicorns goes viral

-- Tiffany Hsu

Photo: The Foie Gras Rossini from the Japan Premium series. Credit: Wendy's Japan via Bloomberg

Food prices will continue to rise in 2012, says USDA

Apples
Get ready for more high food prices going into 2012 –- the USDA is projecting that next year will bring an overall spike of 2.5% to 3.5%.

That’s less than the 3.25% to 3.75% boost that the Department of Agriculture is projecting for 2011. High commodity and energy prices along with soaring demand for food pushed up the value of items including ice cream, lettuce and bread.

Grocery store shoppers this year watched prices rise as much as 4.75% while diners in restaurants saw menu prices go up as much as 2.5%, with a surge near the end of the year.

As of last month, beef prices were up 9.8% compared with the same month last year. Pork prices were up 6.9% and poultry was 3% higher. With fewer fertile hens around, egg prices were 10.2% higher; dairy was up 8.7%.

The Japanese tsunami and earthquake in the spring pushed seafood prices up 5.9%. Fruits and vegetables also saw a bump, with apple prices up 9.6% year over year and potatoes up 12%.

Whole food prices could reach their strongest annual gains in more than three decades, National Restaurant Assn. economist Bruce Grindy wrote earlier this year. What comes next will depend on weather conditions, fuel prices and the value of the dollar, the USDA said.

RELATED:

Food prices set to rise most in 30 years, economist says

'Twelve Days of Christmas' list priciest ever at $101,119.84

Price of Thanksgiving dinner up 13%, biggest jump in two decades

-- Tiffany Hsu

Photo: Apples cost 9.6% more in November than they did a year ago. Credit: Jim Witmer / AP Photo / Dayton Daily News

Food online: Anti-Groupon and crowd-sourcing to the perfect dish

Jar

In the run-up to the new year, several food analysts have predicted that the restaurant industry will be more crowd-sourced and digitally based in 2012 than ever before.

Take the growing crop of young online start-ups focused on dining.

Smartphone app Foodspotting goes beyond the Yelp model by giving restaurant guests a forum to find and recommend specific dishes nearby. Good eats get a “nom” or a digital blue ribbon from diners, who can upload photos into the Foodspotting community.

As of August, the app has been downloaded more than a million times. According to AdWeek, the founders are now experimenting with partnerships with other start-ups such as deals site Scoutmob that could create a “virtual blackboard” showcasing daily specials from eateries.

There’s also Treatful, a Bay Area company that offers personalized online gift certificates to high-end restaurants in cities such as Los Angeles, New York and Chicago.

The site, started by Stanford business school graduates Brent Looney and Hoon Kim, is known as the anti-Groupon, according to 7x7 magazine. Users no longer have to pick up or use fax machines for hard-copy gift cards –- instead, the no-registration, no-fee site sends it via e-mail on whatever date designated by the customer. 

The company charges restaurants a commission for each certificate purchased -– a quarter of which are bought by corporate clients. Listed eateries in Los Angeles include Angelini Osteria, BLD, Jar and Hatfield’s Restaurants.

Foodily, a recipe and ingredient search engine that launched in February, clocked more than 100,000 downloads within 10 days of launching its iPhone app this fall.

RELATED:

Online pizza sales break records as mobile ordering takes off

LivingSocial launches online restaurant ordering, delivery service

Restaurant predictions for 2012: Popcorn, pine needles, smartphones

-- Tiffany Hsu

Photo: Jar, one of the restaurants included on Treatful. Lawrence K. Ho / Los Angeles Times

Consumer Confidential: Risky massage, Motrin recall, burger wars

Massagepic
Here's your thunder-island Thursday roundup of consumer news from around the Web:

-- We all want a massage to die for ... but not literally. The Food and Drug Administration is warning consumers not to use the ShoulderFlex Massager because at least one person is reported to have died from strangulation while using the device. The massager is sold in retail stores, catalogs and online. It's intended to provide a deep tissue massage to the neck, shoulders and back area while lying down. But the FDA warns that hair, clothing or jewelry can become entangled in the device and cause serious injury or even death from strangulation. There have been reports of one death and one near-death due to strangulation. (ConsumerAffairs.com)

-- Another heads up: Johnson & Johnson has issued another recall of Motrin pain relievers -- the sixth in two years. This time, it's because Motrin IB pills may not dissolve and begin working as fast as they're supposed to as they approach their three-year expiration date. That could delay relief of pain. The recall covers Motrin IB coated caplets and coated tablets, in packages with either 24 pills or 30 pills. A company spokeswoman says J&J is recalling packages only from retailers, not consumers, because there's no safety concern. If you have questions, call J&J at (888) 222-6036. (Associated Press)

--Who rules Burger Land? Well, McDonald's is still top dog, but the battle for second place is heating up. Wendy’s is poised to pass Burger King in market share sometime next year, according to market analysts. It would be the first time that Wendy’s, which was founded in 1969, has reached the No. 2 spot. Burger King, which once held about 20% of the $65 billion hamburger market, fell to 13.3% last year and could soon dip below 10%. Wendy’s, meanwhile, has focused on taste, offering thicker burgers with buttered buns while reminding customers of its glory days with a remake of its 1984 "Where’s the beef?" commercials. (Financial Times)

-- David Lazarus

Photo: This is a good massage. But the FDA says you could get strangled if you use a ShoulderFlex massager. Credit: Jay L. Clendenin / Los Angeles Times

 

'Healthy' menus up 86%, including at airport restaurants

Restaurants
Diners these days are finding more options that are better for them at eateries, even the ones at the nation’s busiest airports.

Restaurants using the word “healthy” in menu descriptions is up 86% over the last year, according to research group Technomic.

Instances of “low fat” on menus are up 33%, while “fat free” and “non-fat” are appearing 12% more often than they were last year. Meals claiming to be “no sugar” are now 51% more popular on menus.

And although “low-calorie” shows up less often than the other descriptors, its presence on menus jumped 154% year over year.

Chains including Starbucks, Jack in the Box, McDonald’s are all trying to appeal to the health-minded set as regulators crack down on calorie counts and fatty children’s menus.

Even airports, not normally known as bastions of good-for-you cooking, are offering a wider range of healthful alternatives to greasy burgers.

At the nation’s busiest 15 airports, 83% of restaurants offer at least one low-fat, cholesterol-free meal, according to a recent report from the Physicians Committee for Responsible Medicine. In 2001, just 57% of airport eateries could say the same.

Detroit’s Metropolitan Wayne County Airport was ranked the healthiest travel thoroughfare, with all of its 59 restaurants offering wholesome meals. Just 33% of those establishments made the list in 2001.

San Francisco International Airport was second-best, with healthful fare at 96% of its 68 eateries, followed by good eats at 92% of 38 dining spots at Washington's Dulles International Airport.

Los Angeles International Airport was third to last on the list, with 76% of its 55 restaurants featuring low-fat, cholesterol-free food.

RELATED:

McDonald’s to focus on quality ingredients in ad campaign

Toys with McDonald's Happy Meals will cost a dime in San Francisco

-- Tiffany Hsu

Photo: Travelers dine at the Tom Bradley International Terminal at LAX. Credit: Allen J. Schaben / Los Angeles Times

Restaurant predictions for 2012: Popcorn, pine needles, smartphones

Popcorn

The crystal balls are out at restaurants around the country as the food industry tries to predict what’ll be cooking in 2012.

Publicis Consultants USA is pegging smaller portions and “mini-bites” to show up on plates next year. The food marketing firm also expects menus to embrace popcorn, the spice turmeric and the Australian fish barramundi.

"Economic circumstances are prompting more than the usual degree of change in the highly adaptable food and beverage business, with higher food costs and budget-minded consumers driving innovation," Publicis President Steve Bryant said in a statement.

The shaky economy will cause mom-and-pop eateries to close in droves in 2012, especially as lenders shun them and larger chains cut prices and offer more coupons, according to Baum+Whiteman. Up to 10,000 independent restaurants could close next year, the food and restaurant consultancy said.

But those that stay open will have a spurt of gastronomic creativity, the group said.

Continue reading »

Bubba Gump Shrimp owner to buy Morton’s steakhouse chain

MORTONS
Storied -– and expensive -– Chicago steakhouse chain Morton’s Restaurant Group Inc. is going private in an acquisition by Bubba Gump Shrimp and Rainforest Cafe owner Tilman J. Fertitta.

Fertitta’s company, Houston-based Landry’s Restaurants Inc., will buy Morton’s for $6.90 a share, a 34% premium on Thursday’s $5.16 closing price. That's about $117 million total.

The upscale steakhouse chain has a glittering past, including 14 years as the host to Vanity Fair’s famed Oscar party in West Hollywood. There are 11 Morton’s locations in California.

Morton’s board of directors has unanimously approved the deal, which Fertitta plans to finance through cash and debt and which is expected to close in early February. In midday trading Friday in New York, Morton’s shares were up 32.6% to $6.84.

Last month, Landry’s scooped up McCormick & Schmick’s Seafood Restaurants for $131.6 million after months of hostile takeover attempts.

RELATED:

Carl's Jr. and Hardee's parent company to be sold

Rainforest Cafe owner Landry's to buy McCormick & Schmick's

-- Tiffany Hsu

Photo: A 48-ounce porterhouse steak at Morton's in Santa Ana. Houston-based Landry’s Restaurants Inc. will buy the Morton’s chain. Credit: Robert Lachman / Los Angeles Times

Olive Garden parent Darden's earnings slip 28%

Olivegarden
Darden Restaurants Inc. would have had a strong second quarter if not for the poor performance of its Olive Garden chain, which pulled net income for the entire company down 28%.

Earnings slipped to 53.7 million, or 40 cents a share, from $74.5 million, or 53 cents a share the same quarter in 2010. Revenue for the quarter, which ended Nov. 27, was up 6.1% to $1.83 billion.

Orlando, Fla.-based Darden said its other brands had “strong momentum.” Red Lobster’s same-store sales were up 6.8% and LongHorn Steakhouse saw a 6% sales increase. Seasons 52 locations open more than a year pulled in 2.9% more revenue this quarter, while Bahama Breeze enjoyed a 0.5% uptick and the Capital Grille attracted 5.7% more sales.

But Darden Chief Executive Clarence Otis said in a statement that the strong sales were “offset by below expectation sales results at Olive Garden, pressure on check averages as guests continue to be cautious about spending and unfavorable year-over-year food costs.”

Olive Garden, which serves Italian fare and has dozens of branches in California, needs to get “back on track,” Darden executives said. Same-store sales were down 2.5% over the quarter, with a 5.7% plunge in November alone.

The chain will attempt new promotions and advertising efforts while changing up its core menu and remodeling dowdy old restaurants, executives said.

Earlier this month, the company anticipated Olive Garden’s weakness by cutting Darden’s earnings forecast, saying that it expects earnings per share to increase 4% to 7% instead of the 12% to 15% bump it predicted earlier in the fall. Revenue in 2012 is expected to be slightly less than Darden had previously anticipated.

The earnings report, which was announced before the market opened, sent Darden shares down nearly 2% to $42.91 in midday trading in New York.

RELATED:

Unemployment and dour diners keep restaurant traffic flat in 2011

Michelle Obama, Olive Garden, Red Lobster vow healthier kids' meals

-- Tiffany Hsu

Photo: Olive Garden. Credit: Darden Restaurants

McDonald’s to focus on quality ingredients in ad campaign

McDonald's Corp., home of the assembly-line burger, will soon roll out an ad campaign that focuses not on speed or cost but on the quality of its ingredients.

The giant fast-food chain teased a simple 15-second spot featuring farmer Frank Martinez peeling and then biting into a potato.

"They're good now," he says just before the scene cuts to a rustic image of the golden arches surrounded by plants and hills. "Just wait until they're McDonald's fries."

Martinez will join another potato grower, a lettuce farmer and a beef rancher in a series of television, print and online advertisements that are scheduled drop on Jan. 2. The spots, as well as longer-form versions, will also be featured on a dedicated website.

Under pressure from increasingly health-conscious diners, competing restaurants promoting more nourishing options and lawmakers wielding new regulations about meal content, fast-food companies are trying to prove that they too can offer natural, garden-fresh fare. 

McDonald’s dumped Sparboe Egg Farms, one of its suppliers, after viewing undercover footage showing animal abuse at the company's Midwest facilities. The chain's pork supplier, Smithfield Foods, has promised to phase out cramped crates for pregnant pigs by 2017.

Other restaurant companies such as Wendy's and Domino's have hopped on the artisan trend, which touts local, small-scale food production.

Burger King's ads are now dominated by visuals of succulent patties and crisp produce. Del Taco is making over some of its restaurants with wall murals stating "Chicken grilled here" and "Cheddar hand-grated here."

RELATED:

Domino's launches a line of artisan pizzas

Burger King freshens advertising campaign, kicks out the King

-- Tiffany Hsu

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