Fries with that slowdown?
A two-year love affair—2014 and 2015—between Wall Street and restaurant companies resulted in heavy-hitting IPOs nationally and locally, including new OC public players Habit Restaurants Inc. in Irvine, Del Taco Restaurants Inc. in Lake Forest and El Pollo Loco Holdings Inc. in Costa Mesa.
The following two years—2016 and 2017—were a dating game, perhaps an app, where customers tried multiple, sometimes exotic, fast-casual concepts as traditional sit-down venues vied valiantly for attention.
This year and next is everyone trying to make the relationships work.
Keeping the romance alive can include adding a new chief executive or more emphasis on foreign affairs.
Irvine-based Taco Bell Corp. added or upgraded franchising agreements in a half-dozen countries—India, Thailand, Australia, New Zealand, Brazil, and Spain—looking for love.
It’s been a long time since all a fast food chain needed to make new friends was a full breakfast menu and a tip jar.
Now marketing, menu diligence, food delivery, social media and savvy tech work are essential parts of spreading the love.
COMPANY TO WATCH:
Chipotle Mexican Grill Inc.
In February, Chipotle named then-Taco Bell Chief Executive Brian Niccol to its top post, starting in March.
The chain, a fast-casual pioneer that began in 1993, had slipped, as trailblazing mountain climbers can, but even off-topic hadn’t careened completely off the peak and sales—slammed for three years by foodborne illness events—regained their pre-dive level of $4.5 billion.
Niccol’s mandate from Chipotle was based on marketing and operational chops. His to them included being based here rather than Colorado. Chipotle’s headquarters occupied Newport Center space in September.
Since Niccol’s hire, he’s added four of Chipotle’s other nine C-suite executives, including:
• Chris Brandt, whose resume includes branding at Taco Bell as chief marketing officer.
• Marissa Andrada, chief people officer, whose experience includes Kate Spade and Starbucks Corp.
• Roger Theodoredis, chief legal officer, previously at Danone North America.
• Tabassum Zalotrawala, chief development officer, who comes from the Panda Restaurant Group Inc.
Three others in the C-suite are relative newcomers as well. Joining last year were Scott Boatwright, chief restaurant officer and a veteran of Arby’s Restaurant Group Inc., and Laurie Schalow, chief communications officer, who was previously at Yum! Brands Inc. One of her roles there was to oversee crisis management, including at Taco Bell. Curt Garner, chief digital and information officer, joined in 2015 after similar work at Starbucks.
The only C-suite leftovers are founder Steve Ells, who relinquished the chief executive role in February to become executive chairman, and Jack Hartung, chief financial officer, who joined the firm in 2002.
Markets loved on Chipotle—shares have rocketed 80% from Valentine’s Day, the first trading time after it named Niccol. It’s topped analysts’ consensus profit estimates for three straight quarters.
In February, Chipotle is scheduled to report full-year results and analysts are predicting 7.9% growth to $4.8 billion.
Watch to see if Chipotle bumps 2019 sales estimate above the current analyst consensus of 7.9%.
PERSON TO WATCH:
Randy Sharpe
Sharpe was named chief executive of Cypress-based Xperience Restaurant Group, formerly Real Mex Restaurants Inc., in November as the chastened chain worked its way through its second bankruptcy in a decade.
Xperience runs some of OC’s first loves in our ongoing romance with Mexican-themed dining—El Torito, Acapulco, Chevy’s. But Real Mex went to seed by forgoing capital expenditures, letting menus age badly and losing its youthful edge in customer service.
Location count dropped from 245 in 2006 to 67 in November; sales plunged from $534 million to less than half of that.
Time to get Sharpe.
XRG owner Z Capital Group LLC in New York hired the ex-Romano’s Macaroni Grill chief executive—he led them down the aisle and out of a bankruptcy too—presenting him with a combo plate of duties this year.
Sharpe’s got systems to standardize and will go long on delivery and catering this year.
A new dance partner in the future isn’t impossible either: In 2016, Real Mex looked at buying San Diego-based Garden Fresh Restaurant Corp., which owned a hundred Souplantation and Sweet Tomatoes restaurants.
Now it has no debt and Sharpe is promising a brighter future. Its 3,700 employees are depending on Sharpe to make the right moves.
