Restaurant prices rose by 6% in 2021, according to the Bureau of Labor Statistics, and fast food is more expensive now than it was before the pandemic. Places like Wingstop have even pivoted to serving more chicken thighs, instead of wings. The increased price of chicken comes from general inflation and also specific supply chain issues related to chicken wings.
Domino's cut the number of chicken wings in its $7.99 carry-out meal from 10 pieces to eight as well. Carrols told investors that the franchisee plans on raising menu prices again this year.īurger King isn’t the first chain that has cut the amount of chicken in one of its menu staples. Burger King most recently pulled the popular Whopper off the value menu. Carrols has increased the prices of other menu items in past months, including reducing the number of discounts available. The lower number of nuggets will not have a lower price.Īccording to CNN, Carrols cited inflation as the main motivator for the change in the number of nuggets. Carrols Restaurant Group, which operates 14% of Burger King’s 7,000 US locations, recently informed investors that its restaurants will lower the number of chicken nuggets in meals from 10 pieces down to eight. Restaurant Brands reported fourth quarter profit and sales that beat expectations earlier this month.Ĭarrols stock has slumped 57.3% over the past year.In part of a larger trend shaping the entire fast food industry, a major Burger King franchisee is lowering the value of its chicken nugget meal. Truist rates Carrols stock buy with a $6 price target.īurger King and Popeyes are both part of the Restaurant Brands International Inc. ” Inflationary pressures are muting margins, but we expect a moderation in 2H22, driving margin expansion.”
“Carrols is taking significant menu pricing (~8%), but has been careful to align price actions with competitors, limiting the risk of overshooting,” wrote Truist in a note. In addition to challenges tied to inflation and weather, Carrols is undergoing a change in leadership, with the company announcing a new chief executive effective April 1.Īlso: Carrols names McDonald’s vet as CEO February, on the other hand, has been “promising.” Sales totaled $416.1 million, down from $420.5 million and just ahead of the FactSet consensus for $415.8 million.Ĭarrols operates 1,028 Burger King restaurants across 23 states, and 65 Popeyes restaurants in seven states.Ĭomparable restaurant sales at Burger King rose 7.4% for the quarter, and were up 1% at Popeyes.Īccordino called January 2022 a “challenging month” with snowstorms in major markets and omicron-related staffing issues driving down Burger King comparable sales by 1.4%. An adjusted loss of 15 cents per share was narrower than the FactSet consensus for a loss of 25 cents per share. We also intend to continue to move pricing to partially offset inflation to the extent possible without impacting traffic.”Īnd: Kraft Heinz and TheNotCompany joint venture will focus on plant-based foodsĬarrolls reported a fourth quarter net loss of $16.4 million, or 33 cents per share, after a loss of $18.6 million, or 37 cents per share, last year. “While we cannot predict when these inflationary cost pressures will end, we can say that we believe that in the back half of 2022, the year-over-year percentage increases for labor and commodity costs will moderate. As a result, commodity inflation overall was approximately 16% this past quarter compared to the prior year period,” Accordino said.
“Domestic food, paper producers and distributors supplying most of our commodities are dealing with labor constraints, along with higher fuel costs and are passing the increases on to us. See: Nitro Pepsi, a creamy cola that leaves a frothy mustache, launches March 28Ĭarrols detailed the commodity inflation that the company is facing, with beef, which makes up a quarter of its food basket, up 33% over last year.Ĭarrols is also facing labor inflation, with the company raising average hourly wages by 14% year-over-year as it tried to maintain open hours from 6am to 11pm while competing to hire and retain workers.
The Whopper, the brand’s most popular product by a wide margin, has also been removed as a core discount item and is no longer available in the two-for-six or two-for-five promotions.” “Recent actions in this regard from our franchisor include lifting price caps on value menu items and reducing the number of nuggets meals from 10 pieces to 8. “As you may have recently read, the Burger King brand has about a dozen menu and promotional initiatives, some of which have already been implemented and some that will be implemented over the course of this year,” said Daniel Accordino, chief executive of Carrols, on the Thursday earnings call, according to a FactSet transcript.
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