Restaurant And Hospitality News – November 23, 2015
By Christine Kern, contributing writer
In news this week, KFC is piloting a new home delivery service in two U.S. cities, Marriott is buying up Starwood to create the world’s largest hotel chain, and protests for the mandatory increase in minimum wage are expanding across the nation.
KFC Pilots Home Delivery Service
KFC has announced that it will be piloting home delivery service in Los Angeles and San Francisco. The chain expects to expand delivery to the Houston area by the end of the year, with more cities potentially to be added in 2016. To complete the deliveries, KFC is working with online delivery company DoorDash. Customers will place orders through DoorDash’s app or website, and then can have KFC’s trademarked chicken, biscuits, and cole slaw delivered fresh to their door. The service will not be free, however; customers will be charged a delivery fee between $4.99 and $6.99, depending on customer location, and some prices will be higher than those in-store. Value meals, however, will still stay the same price, according to ABC News. All items on the restaurant’s regular menu will be available for delivery. In all, KFC expects 100 restaurants to offer delivery before it decides to expand the service. There are more than 4,300 U.S. KFC restaurants. Yum Brands Inc. CEO Greg Creed said at a May conference with analysts that its delivery business usually grows at a "faster rate" than its main business. Last month, the company said its restaurants in China plan to expand delivery service in the country. “The great thing about buckets of chicken," Creed said in May, is that "it holds its temperature incredibly well."
Marriott Poised To Create Largest Hotel Chain With Acquisition Of Starwood
Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, Inc., have announced the approval of a definitive merger agreement that would create the world’s largest hotel company. According to a company statement, “The transaction combines Starwood’s leading lifestyle brands and international footprint with Marriott’s strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio.” Combined, the two companies operate or franchise more than 5,500 hotels with 1.1 million rooms around the globe. Arne Sorenson, President and Chief Executive Officer of Marriott International, said: “The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace. This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders. Today is the start of an incredible journey for our two companies. We expect to benefit from the best talent from both companies as we position ourselves for the future. I know we’ll do great things together as The World’s Favorite Travel Company.” The transaction price is more than $12 billion.
“Fight for $15” Protests Expand”
Organizers of the national “Fight for $15” movement that is pushing for increased minimum wages have bolstered their actions with new protests in 270 cities, targeting not just restaurants, but also city halls and other venues like the Republican presidential debate in Milwaukee, according to the Nation’s Restaurant News. Experts predict that the number of protests will rise as the 2016 presidential elections loom. Joe Kefauver, managing partner of public affairs consultancy Align Public Strategies, told NRN, “This set of protests has the potential to be more significant than prior events because we are now within a year of the general election and while the protest will likely be nationwide, there will be a particular concentration in presidential battleground states. Essentially, prior protests have been about driving a narrative around our jobs and our business model,” Kefauver said, “whereas this round of protests will have much more of an eye toward electoral outcomes.” Protesters included workers from national fast-food chains KFC, Wendy’s, Burger King, and McDonalds, among others, as well as home-care, child-care, and other lower-wage workers.
Robert Cresanti, president and CEO of the International Franchise Association, condemned Tuesday’s protests, saying the “political theater” does not help close the income inequality gap. “The franchise business model is a valuable playbook that provides a pathway to personal and professional success and business ownership for aspiring entrepreneurs,” Cresanti said in a statement. “The protests today put the future of these jobs and businesses in jeopardy. Cresanti said the nation needs to look at solutions to the growing economic divide, “however, staging street theater and shutting down restaurants owned by local families who have invested their life savings and created jobs in communities cannot be the answer.” Christin Fernandez, director of media relations and public affairs for the National Restaurant Association, called the protests “SEIU’s recycled attacks on an industry that provides career opportunity and pathways to success for over 14 million Americans.” Fernandez pointed to voters’ rejections of minimum wage increases in elections earlier in November in Portland, Maine, and Takoma, Washington, saying, “Americans are taking note that protests and ballot initiatives are not the real solutions to addressing income inequality,” she said.