Will The Buffet Go The Way Of The Dinosaur?
The COVID-19 pandemic has undoubtedly been tough on restaurants. Many have been able to adapt to the new normal by utilizing food delivery, curbside pickup and drive-thrus to keep sales from cratering.
Others restaurants, such as those that depend on customers dining in to stay in business, have not been so fortunate.
Cici's, the popular pizza buffet chain, announced this week that it has filed for Chapter 11 bankruptcy as the pandemic scared diners away from buffets. In the filing, Cici's said COVID-19 "significantly disrupted Cici's restaurant operations and severely limited customer demand" as revenues fell from more than $177 million in 2019 to just over $76 million last year.
Cici's struck a deal to sell itself to its primary lender, D&G Investors, which acquired $82 million worth of the company's debt in December, according to Restaurant Business. Cici's said in the filing it had between $10 million to $50 million in assets and $50 million to $100 million in liabilities.
It's been a long fall from grace for Cici's and its franchisees, which operate 318 locations across 26 states. The total is just half the number of locations Cici's had a decade ago.
The rise of food delivery hasn't been kind to Cici's as the company's CFO Richard Peabody noted that digital ordering and delivery has grown 300% faster than dine-in traffic since 2014.
"This trend poses significant challenges to Cici's all-you-can-eat buffet model, which depends on in-store dining for approximately 99% of its revenue," Peabody said in the filing.
Despite introducing digital ordering and delivery services to adapt its business model, Cici's admitted it must do more to differentiate itself from the slew of other pizza companies that have found success in recent years.
“CiCi's introduction of digital ordering and delivery services has amplified its ability to reach customers, but the Company's reliance on third party dispatch and delivery platforms has impacted margins and may reduce customer loyalty over the longer term by lowering switching costs," Peabody said. "As such, and because the in-store experience features less prominently today in the overall customer value proposition, CiCi's must work harder and more creatively to differentiate its offerings from the competition."
With the pandemic likely changing consumers' behaviors forever, Cici's announcement this week may be a warning that buffets could soon become a concept of the past.
Sanofi lends a hand to Pfizer. Sanofi announced it will manufacture more than 100 million doses of Pfizer and BioNTech's coronavirus vaccine in a rare move that shows the urgency of producing vaccines. Sanofi will lend capacity at its factories as its own vaccine candidate with partner GlaxoSmithKline faces delays. "We have moved activities across sites to be able to manufacture over 100 million doses of BioNTech's COVID-19 vaccine, on a temporary basis," a Sanofi spokesperson said. "This is the maximum we can produce in this timeframe with the industrial capabilities we have available."
Pepsi and Beyond Meat team up. PepsiCo and Beyond Meat are teaming up to form the The PLANeT Partnership, LLC (TPP), which is a joint venture to develop, produce and market snacks and beverages made from plant-based protein. "Beyond Meat is a cutting-edge innovator in this rapidly growing category, and we look forward to combining their unparalleled expertise with our world-class capabilities in brand-building, consumer insights and distribution to deliver exciting new options," PepsiCo Global Chief Commercial Officer Ram Krishnan said. Financial terms of the joint venture were not disclosed.
Pizza Hut debuts Detroit-style pizza. Pizza Hut will offer a Detroit-style pizza in four different varieties for a limited time as the the company capitalizes on the newfound popularity of the pizza style. Pizza Hut said it tested 500 different iterations of the pizza before settling on the final recipe. "Detroit style pizza is the fastest-growing trend in pizza: it's no longer a Midwest-only thing," Pizza Hut chief brand officer David Graves said. "As America's iconic pizza company, when there's a big trend, our customers expect us to bring those pizzas to the rest of America."
CarParts.com announces new hub for EVs. CarParts.com announced the debut of a dedicated shopping hub for hybrid, plug-in hybrid, and electric vehicles. "Over time, we've seen the number of EVs on the road grow and thus the need for more replacement parts, and we will continue to make investments in our technology, supply chain, and customer experience to create the number one online destination for the EV community with the information, tools, and parts they need to get back on the road," CarParts.com CEO Lev Peker said.
Martha Stewart launches pet CBD products. Through a partnership with Canopy Growth Corp, Martha Stewart announced she is launching a line of CBD oil drops and soft-baked chews for pets. Stewart said the products can improve the mental and physical well-being of pets as well as reduce stress and promote healthy joints and movement. "My dogs are not only my companions, but they are part of my family, and I prioritize their emotional and physical well-being as I do my own," Stewart said. "Just as CBD can support human wellness, it's been shown to improve the quality of life for pets as well."