Restaurant And Hospitality News - December 12, 2016
By Christine Kern, contributing writer
In news this week, President-elect Donald Trump has tapped fast-food CEO Andrew Puzder as his new Labor Secretary; and Starbucks has set its sights on a 50 percent increase in global stores over the next five years.
Carl’s Jr. CEO Andy Puzder Selected As Donald Trump’s New Labor Secretary
President-elect Donald Trump has tapped restaurant CEO Andrew Puzder as the next labor secretary, according to the New York Post. Puzder supported the Trump campaign, serving as an economic adviser, and praised the president-elect as a “pragmatic centrist” and “negotiator.” Puzder is also an opponent of raising the minimum wage and of ObamaCare, stating that both are “job-killers”.
The day after the presidential election, Puzder told CNBC that “The ACA has to go and it has to go quickly. No. 1, it increases the costs of employing people…and No. 2 it takes discretionary income away from consumers.” He argues that Obamacare premium increases have reduced the ability of consumers to eat at restaurants.
In a statement released by his transition team, Trump praised Puzder for a "record fighting for workers" and said he would ensure occupational safety standards.
"He will save small businesses from the crushing burdens of unnecessary regulations that are stunting job growth and suppressing wages,” Trump said.
Puzder also said he agreed with Trump that "the right government policies can result in more jobs and better wages for the American worker."
Puzder is the CEO of CKE Restaurants, parent company of Carl’s Jr. and Hardee’s, which employs approximately 70,000 people. Puzder also opposes too much regulation of businesses and opposes the expansion of overtime pay. Puzder’s appointment is a positive sign for restaurant owners, who worry about the impact of raising minimum wage and overtime thresholds on their businesses.
Puzder’s appointment was greeted by support from many business and restaurant/hospitality organizations. National Restaurant Association CEO Dawn Sweeney said that Puzder “brings much-needed business experience to the Department of Labor. He has a proven track record of turning around businesses, and his background in the restaurant industry will help foster an environment for job creation.”
“Andy would be an exceptional choice to lead the Labor Department and we applaud President-elect Trump for recognizing Andy’s business experience and policy acumen on so many issues impacting employers and employees in today’s economy,” the International Franchise Association said in a statement.
And N{CCR Executive Director Rob Green stated, “Once confirmed, Mr. Puzder will be an effective advocate for balanced federal policy at the Labor Department. That benefits all stakeholders – including chain restaurants, small businesses and their employees around the country.”
Starbucks Releases Growth Plan, Seeks To Increase Number of Global Stores By 50 Percent
Starbucks has announced that it seeks to open 12,000 new locations over the next five years, boosting its number of stores by almost 50 percent globally. In addition, the chain will be adding more food items to its menu in 2017, including organic soups, gluten-free breakfast sandwiches, and a wheat-free cooked egg product. The five-year growth plans were unveiled for investors on December 7th, following the announcement that Howard Schultz would be stepping down as CEO in April. The growth plan responds to growing competition from Dunkin’ Donuts and McDonalds, which have been adding more specialty coffee drinks to their respective menus.
One key focus for expansion will be in China, where Starbucks plans to open 5,000 new stores by 2021. Starbucks has been doing business in China for 17 years. According to the company, China is anticipated to overtake the U.S. as its largest market in the future. Currently, Starbucks has approximately 2,500 Chinese locations and more than 13,000 in the U.S.
"They have been talking-up for years now how China needs to rebalance its economy away from exports and investment, toward domestic consumption and services – that means, among other things, the kind of services that Starbucks provides," Linda Lim, professor of strategy at the University of Michigan Ross School of Business in Ann Arbor, tells The Christian Science Monitor.
Starbucks will also be unveiling an app update in 2017 that will utilize artificial intelligence to allow interactive voice ordering for customers. The company is also partnering with popular messaging app WeChat in China, which will allow users to purchase digital Starbucks gift cards for others.
While Schultz is stepping down as CEO, he is definitely not leaving the company; he will oversee the growth of its high-end Starbucks Reserve Roasteries stores. According to Schultz, increased attention to technology adaptions will be a critical element for brick-and-mortar retail businesses as they face changing shopping habits.