MYT - Streamlined Dining Concepts Buoy the Industry During Unprecedented Times
FinancialBuzz.com News Commentary
New York, NY (10/6/2020) – The pandemic, as well as the measures that were implemented to combat it, have damaged the economy across the board. Yet, the restaurant and dining market in particular was hit severely. Full-service and fast-food restaurants are the two largest segments of the commercial food service market and together add up to represent about 73.1% of all food-away-from-home sales in 2019. While full-service establishments have wait staff, in contrast, fast food restaurants use convenience as a selling point; they have no wait staff, menus tend to be limited, and dining amenities are relatively sparse. According to the National Restaurant Association, restaurants are the nation’s second-largest private-sector employer, providing jobs for 1 in 10 Americans. Fast food chains are also the ones recovering faster from the consequences of the economic shutdown. Urban Tea, Inc. (NASDAQ: MYT), Darden Restaurants, Inc. (NYSE: DRI), The Wendy’s Company (NASDAQ: WEN), McDonald’s Corporation (NYSE: MCD), Yum! Brands, Inc. (NYSE: YUM)
According to a report by CNBC, using data from Bank of America credit and debit card holders, analysts calculated that on July 1st, the trailing seven-day average spend at large chain restaurants was down 4% compared with the year-ago period. At small restaurant chains and independents, spending fell 25%. “Small chains and independent eateries tend to be casual dining and fast-casual establishments, while large chain restaurants range from full service to fast food. The closure of dining rooms and the shift to social distancing has hit the casual dining and fast-casual segments harder,” the data clarifies.
Urban Tea, Inc. (NASDAQ: MYT) announced breaking news earlier last month that, “it has entered into a share purchase agreement (the “Agreement”), pursuant to which the Company agreed to pay $400,000 in cash to acquire 80% of the equity interest in Guokui Management Inc. (“Guokui”). Guokui is incorporated under the laws of New York State and has been operating CROP CIRCLE, a casual street food restaurant in New York City, since August 2020. The Agreement also includes details of how the two parties may collaborate in the future.
Upon closing of the transaction contemplated by the Agreement, MYT will own the registered trademark of “CROP CIRCLE” in the United States and operate the Crop Circle restaurant, which features guokui, an oval shaped baked flatbread with various filling selections, a popular street snack originating from northern China’s Shaanxi Province. CROP CIRCLE also provides other meals combining classic and modern styles. MYT currently owns the trademark “MENO” and operates MENO, a modern tea and coffee shop with a small curated food menu. The ownership of these two restaurants marks the implementation of MYT’s initial brand strategy in the United States. Going forward, the Company plans to deepen its roots in the US market based on the restaurants’ operating performances.
Ms. Kan Lu, CFO of Urban Tea, commented: ‘The signing of the Agreement enables the Company to better navigate the casual food and drink market in NYC. Through building brand awareness and launching new restaurants, the partnership with Guokui shareholders will take our expansion plan on an exciting journey. We remain committed to our common core values of providing culturally inspired food that is loved by customers in America. With Guokui’s management team, we look forward to opening more restaurants and bringing traditional Chinese cuisine to more guests across the U.S.’
About Urban Tea, Inc. Urban Tea, Inc. is an emerging specialty tea product distributer and retailer headquartered in Changsha City, Hunan Province, China. Through its wholly owned subsidiary, Mingyuntang (Shanghai) Tea Limited which controls Hunan Ming Yun Tang Brand Management Co., Ltd. and Hunan 39 Pu Tea Co., Ltd., the Company currently market a wide range of trendy tea drinks, light meals, and pastries targeting China’s new urban generation in Hunan province. Our products are focused on not only their taste but also their aesthetic presentation and health benefits. Our products are currently being offered via our own stores. For more information, please visit: http://ir.h-n-myt.com/investor.”
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Darden Restaurants, Inc. (NYSE: DRI) announced additional information given the dynamic environment resulting from COVID-19 and announced the details of a new term loan agreement. As a result, we are providing an intra-quarter business update to provide quarter-to-date sales trends and other updates on cash utilization and liquidity. Statement from Gene Lee, CEO.
The health and safety of our guests and team members has always been our first priority, and we continue taking measures to keep our restaurants safe. That is why we introduced a permanent Paid Sick Leave program early last month, closed our dining rooms on March 20th and began to operate our restaurants in a To Go-only capacity. To support our hourly restaurant team members who have not been scheduled while our dining rooms are closed, we rolled out a three-week Emergency Pay Program. Meanwhile, our hourly restaurant team members who are still working will receive an additional payment to help cover unexpected costs, such as transportation and child care, incurred as a result of the current situation.
The Wendy’s Company (NASDAQ: WEN) reported back in July the national launch of ‘Wendy’s Rewards ’ loyalty program, allowing customers the opportunity to earn points to unlock rewards for their favorite menu items. To kick off Wendy’s Rewards, fans can get double points on their first order for a limited time+. “Wendy’s has some of the most loyal customers around, and we’re thrilled to launch a program that rewards them for their excellent taste in craveable, high-quality food,” said Carl Loredo Chief Marketing Officer for The Wendy’s Company. “What better way to reward them than with icons like Spicy Nuggs, Baconator, Frosty-ccino, Honey Butter Chicken Biscuit, and so much more.”
McDonald’s Corporation (NYSE: MCD) announced earlier last month a global partnership with TerraCycle’s circular packaging service, Loop, to test a new reusable cup model for hot beverages. The initiative, which will first be trialed in 2021 across select McDonald’s restaurants in the UK, helps customers enjoy their favorite McDonald’s hot drink in a reusable cup, while cutting down on packaging waste. The model marks significant progress toward innovative circular packaging solutions that help protect the planet for communities today, and in the future. “We’re on a journey to rethink how we package products to give customers options that reduce waste, maintain the highest safety standards, and enhance the McDonald’s experience they expect and enjoy. That’s an innovation challenge, and it’s one we think the Loop model has potential to help us solve,” said Jenny McColloch, Vice President, Global Sustainability, McDonald’s Corporation. “Our commitment to communities is one of our core values as a company, and this pilot will generate important local insights and lessons to share along the way. We’re excited to assess how new reusable packaging models could work within our system as we accelerate circular packaging solutions with our partners around the globe.”
Yum! Brands, Inc. (NYSE: YUM) released recently its annual Global Citizenship & Sustainability Report, highlighting the Company’s strategic investment in socially responsible growth and outlining efforts of its KFC, Pizza Hut, Taco Bell and The Habit Burger Grill brands to make a meaningful impact in three strategic focus areas: people, food and planet. The Company advanced its global citizenship and sustainability agenda, called its Recipe for Good, by creating a new social purpose to unlock opportunity in frontline restaurant teams and communities with a $100 million investment over five years. In addition, Yum! expanded efforts to offer customers globally more balanced choices including plant-based and vegetarian menu items, and the Company continued its climate change journey by increasing efficiencies in its restaurants and corporate offices and making progress on key deforestation commitments including paper, palm oil, beef and soy. “As a global restaurant company, we can and must do more to unlock opportunities and make real and lasting change that will benefit our businesses and communities,” said David Gibbs, CEO, Yum! Brands, Inc. “To reflect the growing intersection of business and purpose, we recently integrated our Recipe for Growth – the guiding principles of our business strategy – with our Recipe for Good. This unified approach will help us better serve our employees, customers and communities when it comes to the issues they care about most.”
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