With America running for fitness, their diners still favor salads and soups over chicken wings that are boldly flavored. Continuing the trend, Panera Bread and Buffalo Wild Wings posted their results of sales this quarter just minutes after the other on the same day. Panera is on the winning side with better sales and higher projection for the next fiscal year as compared to Buffalo Wild Wings. The Q4 results were disappointing for the latter as they were more than 4% down in after hours trading.
The CEO of Buffalo Wild Wings and their President as well, Sally Smith blamed the restaurant’s environment that is now challenging and this excuse was also trending among other restaurant chains as this industry is suffering from broad traffic softness. Even international chains like Starbucks and McDonald’s have been pulled into this downfall and experts blame this on the grocery prices that are declining and the prices of restaurants increasing due to worker salaries being higher. Not much traffic is expected for restaurant chains this fiscal year, which could result in more downfalls.
According to Sally, December was not easy for them, even after her loyalty program, wing promotion on Tuesdays and a lunch special to improve traffic in that quarter. Even after that, there was a decline of 4% of same store sales at restaurants owned by the company and the revenue showed a 0.8% increased only totaling to $494.2 Million, which missed the expectations of the analysts.
Panera, on the other hand, is much more stable with Q4 revenue of $727.1 Million seeing a 5% increase and their net bakery café sales also increased by 3%. They still were below Wall Street’s expectations, but Ron Shaich, the CEO and Chairman said that they have captured the market share from the industry this year.
Their move of pushing diners into cleaner ingredients is giving good hopes as they recently achieved their benchmark, according to a statement by the company. A change towards cleaner and healthier food has been seen in the consumers and Panera believes that this is going to last.
Panera is also hoping to invest in a lot of growth drivers like digital orders and delivery and according to them their digital sales account for more than 24% of the total sales of the company-owned bakeries. They also announced that about 15% of their total restaurant fleet has delivery systems now.
It’s good that customers are shifting to healthier food habits, but a cheat day is recommended in all of our diets. Therefore, companies like Buffalo Wild Wings would definitely claw their way back into superiority soon.