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Strange things are happening in Fast Food. It seems like every single one of them is having an identity crisis. Partly due to negative stigma surrounding food created in a lab and the success of higher end shops like Shake Shack, fast food companies are trying to be something they’re not, upscale.
It all started when McDonald’s put espresso machine’s behind the counter and thought they could trick you into sipping latte’s and reading Reddit on your iPad in one of their restaurants. Then there’s Taco Bell busting out their high-end cantina locations that serve beer and bottom shelf tequila infused slurpees they call margaritas. Wendy’s plans to have several hundred locations which feature lounge seating with fireplaces, flat-screen TVs, Wi-Fi and digital menu boards. And most recently,
a Burger King in Finland announced an in-store sauna. I can’t eat chicken fries without spilling buffalo sauce on my shirt. Normally I try to keep dipping sauces out of my chest hair. Unless it’s a Thursday.
My question is, why? Taco Bell. Why are you trying to be upscale? Just be yourself. You’re a terrible excuse for a Mexican restaurant but I love you anyway. I don’t know who’s on your board that comes up with these taco ideas but those pot heads are brilliant. Doritos Cheesy Gordita Crunch. Yes, yes, yes and yes! But trying to look like a Chipotle? Come on. Actually striving to look like the place that was passing out E Coli filled burritos like candy on Halloween.
Maybe I’m wrong. Maybe Taco Bell was really a cantina on the inside all along. And now, Taco Bell is finally brave enough to be a cantina, as it should have been all along.
Honestly, these fast food places are on to something. My last video about the Death of the American Mall talked about how retail locations are dying because the experience is terrible. These higher end locations offer diners a unique experience that they enjoy.
Remember when you were a kid and used to beg Mom to take you to the McDonald’s with a Playland so you could jump around in that ball pit that smelled like hot feet? These fast food locations are trying to bring you back to that excitement, without the strange looks from people wondering why there’s a grown man in the ball pit. I think it’s improving the fast food experience is a great idea.
Analysts agree. While Yum and McDonald’s are both Zacks Rank #3 (Hold) stocks right now, our proxy for Burger King is Carrols Restaurant Group, ticker TAST. Carrol’s is a Zacks Rank #1 (Strong Buy) with a Value Style Score of B to go along with Growth and Momentum Scores of A. Over the last thirty days, two analysts have increased their earnings estimates for the current year. The bullish attitude has pushed up our Zacks Consensus Estimate from 45 cents to 58 cents. The company is coming off three earnings beats in a row, with each beating estimates by at least 11 cents.
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Upscale Fast Food a Winning Strategy
Strange things are happening in Fast Food. It seems like every single one of them is having an identity crisis. Partly due to negative stigma surrounding food created in a lab and the success of higher end shops like Shake Shack, fast food companies are trying to be something they’re not, upscale.
It all started when McDonald’s put espresso machine’s behind the counter and thought they could trick you into sipping latte’s and reading Reddit on your iPad in one of their restaurants. Then there’s Taco Bell busting out their high-end cantina locations that serve beer and bottom shelf tequila infused slurpees they call margaritas. Wendy’s plans to have several hundred locations which feature lounge seating with fireplaces, flat-screen TVs, Wi-Fi and digital menu boards. And most recently,
a Burger King in Finland announced an in-store sauna. I can’t eat chicken fries without spilling buffalo sauce on my shirt. Normally I try to keep dipping sauces out of my chest hair. Unless it’s a Thursday.
My question is, why? Taco Bell. Why are you trying to be upscale? Just be yourself. You’re a terrible excuse for a Mexican restaurant but I love you anyway. I don’t know who’s on your board that comes up with these taco ideas but those pot heads are brilliant. Doritos Cheesy Gordita Crunch. Yes, yes, yes and yes! But trying to look like a Chipotle? Come on. Actually striving to look like the place that was passing out E Coli filled burritos like candy on Halloween.
Maybe I’m wrong. Maybe Taco Bell was really a cantina on the inside all along. And now, Taco Bell is finally brave enough to be a cantina, as it should have been all along.
Honestly, these fast food places are on to something. My last video about the Death of the American Mall talked about how retail locations are dying because the experience is terrible. These higher end locations offer diners a unique experience that they enjoy.
Remember when you were a kid and used to beg Mom to take you to the McDonald’s with a Playland so you could jump around in that ball pit that smelled like hot feet? These fast food locations are trying to bring you back to that excitement, without the strange looks from people wondering why there’s a grown man in the ball pit. I think it’s improving the fast food experience is a great idea.
Analysts agree. While Yum and McDonald’s are both Zacks Rank #3 (Hold) stocks right now, our proxy for Burger King is Carrols Restaurant Group, ticker TAST. Carrol’s is a Zacks Rank #1 (Strong Buy) with a Value Style Score of B to go along with Growth and Momentum Scores of A. Over the last thirty days, two analysts have increased their earnings estimates for the current year. The bullish attitude has pushed up our Zacks Consensus Estimate from 45 cents to 58 cents. The company is coming off three earnings beats in a row, with each beating estimates by at least 11 cents.