A New Restaurant

I write last week about rising prices, and how that can have a negative affect on your business.  That does not mean that it is time to panic.  They say every dark cloud has a sliver lining.  For you, that means that even in a down economy there is opportunity for growth for those that are prepared.

There is the potential to gain new customers as struggling restaurants close their doors.

It is inevitable that there will be a slew of restaurants closing in the near future.  They do it often enough when the economy is good.  The upcoming price increases will force many of them to close.  As they do close (more…)

Papa Johns is trying to avert a marketing disaster in NE Ohio.

A little background info: In the first round of the NBA playoffs the Cleveland Cavaliers faced the Washington Wizards.  The Cavs have bumped the Wizards from the playoffs the past couple of years, and the Wizards didn’t want that to happen again.  Their game plan was to aggressively foul LeBron James every time he went to the basket.  Some of theose fouls were very aggressive,a nd as the series went on James did a bit of complaining.

Papa Johns pizza franchises in the Washington area used this as a marketing tool by giving away free t-shirts with the Papa John logo.  The t-shirts were emblazoned with the word “CRYBABY” and the number 23 (James’ jersey number).

While it may have been good in the Washington market, it destroyed Papa Johns in the Cleveland market (and with Cavs fans nationwide).  Like him or not, LeBron James is becoming a basketball icon with a fan base the reaches worldwide.

In order to win back fans in NE Ohio, Papa Johns is offereing a large, 1-topping pizza for 23-cents.  No I don’t know how much it costs to make a Papa John’s pizza, but my guess is that it’s more than $0.23.  Papa John’s is predicting a 900% increase in pizza sales for this one-day sale.

This ends up being a pretty expensive way to try and repair damage for a dumb marketing ploy that backfired.

Another sign of the struggling economy is Starbucks announcement that they are scaling back their new unit projections for the coming year.  They don’t feel that current sales justify continuing with the new locations that they had planned.

Understand, coffee is a huge business.  Worldwide it is the #1 beverage after water.  Despite mixed health reports (caffeine is bad for you – caffeine good for you), coffee sales in the US remain fairly strong.  Specialty coffee, however, is a luxury item, and those tend to get cut from the budget when times get tough.

In order ot try to boost sales, Starbucks is once again going to give the breakfast market a shot.  The plan is to focus on proprietary baked goods and chilled items.  If that works for them it will help to offset slumping beverage sales.