Archive for May, 2010

Alfalfa sprouts recalled over salmonella concerns

Monday, May 24th, 2010

SILVER SPRING, Md. (May 24, 2010) Raw alfalfa sprouts sold to foodservice and retail are being voluntarily recalled by Caldwell Fresh Foods because of “links” to a 10-state outbreak of Salmonella Newport illness, the Food and Drug Administration said.

The Silver Spring-based FDA said the outbreak has hospitalized six people among the 22 stricken since March 1 by the same strain of salmonella. Eleven illnesses have been reported in California, two have been reported by both Nevada and Wisconsin and that there has been one illness apiece reported by Arizona, Colorado, Idaho, Illinois, Missouri, New Mexico and Oregon, the FDA said.

The FDA put out word of the “urgent” nationwide recall of Caldwell Fresh Foods sprouts Friday. It said the Maywood, Calif.-based firm’s alfalfa sprouts “have been linked to an outbreak of Salmonella Newport infections in consumers in ten states.”

However, a recorded phone message by Caldwell Fresh Foods asserts that none of its products have been confirmed as the cause of the illnesses.

“Let me make one thing clear – We make food safety our most important priority,” company spokesman Maurie Thomas said in the recording late Sunday afternoon.

“There are no confirmed reports that alfalfa sprouts from our facility have caused anyone to become ill. There are no confirmed reports,” Thomas continued, “but as an extreme precaution, due to the possible association with a foodborne illness, we have voluntarily recalled our alfalfa sprouts.”

Some outbreak victims reported eating sprouts in restaurants, the FDA said.

The recall of Caldwell Fresh Foods sprouts involves those labeled as:

•Caldwell Fresh Foods alfalfa sprouts in 4-ounce plastic cups, 1-pound plastic bags and in 2-pound and 5-pound plastic bags in cardboard boxes with a sticker affixed with the printed words “Caldwell Fresh Foods.”
•Nature’s Choice alfalfa sprouts in 4-ounce plastic cups.
•California Exotics brands alfalfa sprouts in 5-ounce plastic clamshell containers.
•FDA representatives said the sprouts were distributed to a variety of restaurants, delicatessens and retailers, including Trader Joe’s and Wal-Mart stores. They added that restaurateurs, delicatessen operators and consumers should not purchase, eat or use raw sprouts from Caldwell Fresh Foods, and added that the sprouts should be returned to the place of purchase for a refund and disposal.

Salmonella can cause serious and sometimes fatal infections in young children, frail or elderly people and others with weakened immune systems, according to the Centers for Disease Control and Prevention. Healthy persons infected with salmonella often experience fever, diarrhea, nausea, vomiting and abdominal pain.

The FDA said it is investigating the outbreak in cooperation with the CDC, the California Department of Public Health, and public health agencies in other affected states. FDA and CDPH personnel are inspecting Caldwell Fresh Foods’ facility and collecting samples, the federal agency said.

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McD franchisee unveils modern design in L.A.

Monday, May 24th, 2010

LOS ANGELES (May 22, 2010) As McDonald’s executives pledged to spend $1 billion in an ongoing effort to upgrade the chain with a new more “relevant” design, franchisee Richard Bechguenturian Jr. has unveiled his version of the next-generation restaurant in the Los Angeles neighborhood of North Hollywood.

Bechguenturian, who with his family operates 14 McDonald’s in the area, said the goal of the redesign was to offer his customers a setting that is “contemporary, modern and forever young,” one that reflects the neighboring North Hollywood arts district known as NoHo.

Local designer Ed Webb helped remodel the store, which features an 88-seat dining room with a mix of booths, high tables and low tables with unsecured Emeco aluminum chairs. At the center is a lounge area with vinyl soft couches, where guests might sit with their laptops and a coffee, taking advantage of the unit’s free WiFi.

Murals decorate the walls, and the unit’s front window resembles a puzzle playfully patterned with the faces of local customers and Ronald McDonald and that also serves to partially block the view of auto body shops across the street.

Bechguenturian said he doesn’t plan to bring the same look to other units, though he does plan to continue upgrading the family’s restaurants. “I’m not sure where or how just yet,” he said.

McDonald’s officials said recently that 400 to 500 McDonald’s locations will be remodeled in 2010 across the country. The plan is to focus on higher-volume locations where the land is owned or the lease has significant time remaining.

At McDonald’s shareholder meeting Thursday, chief executive Jim Skinner said the brand’s reimaging efforts would be a major initiative this year.

“Our restaurants are the heart of our business,” Skinner said. “We’re going to send a strong signal that McDonald’s is relevant. Our research tells us that reimaging benefits all [of] our brand attributes, from the quality of the food to the friendliness of the crew. We’re allocating nearly $1 billion [to the effort], and our owner-operators are contributing as well.”

The remodels are being done in partnership between corporate and franchise operators. The corporate office is contributing an estimated $150,000 to $200,000 and franchisees are covering the estimated difference of $250,000 to $500,000, depending on the design.

Bechguenturian declined to say how much the remodel of his North Hollywood location cost, and McDonald’s officials said they didn’t know how many units in the Los Angeles area might reflect the chain’s new look.

The contemporary remodels began in 2003, and McDonald’s said only about 20 percent of restaurants globally have received the new exterior design, while about 40 percent have had interiors updated.

Franchisees have been given flexibility to customize their design within certain parameters to reflect the nuances of their communities, said Danya Proud, a McDonald’s spokeswoman.

“We’re trying to create a McDonald’s experience,” she said. “We’re serving more customers today than we ever have and our customers are changing.”

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Dave & Busters to be sold for $570 million

Monday, May 3rd, 2010

DALLAS (May 3, 2010) Wellspring Capital Management LLC, the private-equity parent of Dave & Buster’s Inc., is selling the 56-unit casual-dining chain to Oak Hill Capital Partners for $570 million, the companies said Monday.

The deal between Oak Hill and Wellspring, which has owned Dallas-based Dave & Buster’s since 2006, is expected to close in the second quarter of 2010.

Dave & Buster’s is the latest restaurant chain to be sold this year, following buyout announcements from CKE Restaurants Inc., Papa Murphy’s International Inc., Wingstop Restaurants Inc. and On the Border. In addition, California Pizza Kitchen said last month it was exploring strategic alternatives, a move analysts said could result in a sale.

Oak Hill said it would work with Dave & Buster’s current management team, including chief executive Steve King, as it expands the chain.

“We are very excited to partner with Oak Hill Capital given its extensive experience investing in consumer, retail and restaurant companies, as well as its long history of working successfully with management teams,” King said. “We believe Oak Hill Capital will be a value-added partner that will help Dave & Buster’s execute against its strategy of continuing to build its brand and expand its store base.”

Tyler Wolfram, a partner at Oak Hill, said Dave & Buster’s is differentiated from other casual-dining chains by its arcade games and other entertainment aspects.

“We believe there is a tremendous opportunity to grow the Dave & Buster’s store base given its differentiated format, the strength of its brand and the meaningful number of untapped markets across North America and beyond,” he said.

Oak Hill also owns Caribbean Restaurants Inc., a Burger King franchisee based in Puerto Rico.

Dave & Buster’s reported $520.8 million in fiscal 2009 revenue, down 2.4 percent from 2008. Same-stores sales declined 7.8 percent in 2009.

Wellspring acquired Dave & Buster’s for $375 million in a going-private deal in 2006 and first put it up for sale in 2008, reportedly seeking as much as $600 million for the chain, which then had 49 locations.

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Restaurant results improve, headwinds remain

Monday, May 3rd, 2010

(May 2, 2010) While another batch of first-quarter results from public restaurant companies offered some signs of an industry turnaround, executives cautioned that obstacles remain on the road to recovery.

Improved guest traffic and sales trends were reported last week by P.F. Chang’s China Bistro Inc., Famous Dave’s of America Inc., Ruth’s Hospitality Inc. and Panera Bread Co., which followed similar results a week earlier from Chipotle Mexican Grill Inc., McDonald’s Corp. and Brinker International Inc. (EARLIER: Restaurant results show consumers dining out again)

Not all reports were positive, however. Burger King Holdings Inc. blamed severe winter snow storms for much of a 6.1-percent dive in its chain’s U.S. same-store sales, though it noted that its check average and traffic had improved by the end of the quarter. Still, chairman and chief executive John Chidsey warned that the nation’s high unemployment would continue to be a major challenge.

“The U.S. economy is showing mixed signs of improvement with recent reports on improved retail spending and consumer confidence,” he said. “However, high levels of unemployment and underemployment will remain our industry’s biggest headwind.”

Buffalo Wild Wings Inc., which outperformed much of the industry during the recession, also was cautious about the future after reporting that same-stores rose only slightly in its March 28-ended quarter and turned negative for the first 27 days of April.

“While we believe that our previously-announced net earnings growth goal for 2010 of 20 percent may be achievable, improvement in same-store sales and moderate wing costs are key to meeting this goal,” said Sally Smith, the company’s president and chief executive.

First-quarter earnings season continues this week with reports expected from Texas Roadhouse Inc., DineEquity Inc., Domino’s Pizza Inc., Papa John’s International Inc., Morton’s Restaurant Group Inc., Einstein Noah Restaurant Group Inc., CEC Entertainment Inc., and California Pizza Kitchen Inc.

Restaurant operators more optimistic on economy

Monday, May 3rd, 2010

WASHINGTON (April 30, 2010) Restaurant operators were decidedly upbeat in March about their future prospects, which helped to drive the National Restaurant Association’s monthly Restaurant Performance Index to its strongest point since September 2007.

The RPI rose to 100.5 in March, an increase of 1.4 percent from February and the first time in 29 months the index crested above the 100 mark, which signifies industry expansion. Operators’ expectations for the next six months also rose above the 100 point, to its highest level in nearly three years, the NRA said.

“Restaurant operators are increasingly optimistic about growth in sales and staffing levels in the months ahead, while their outlook for the economy soared to its strongest level in five years,” said Hudson Riehle, the NRA’s senior vice president, research and knowledge group.

The Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, was 99.0 in March, an increase of 2.4 percent over February’s level of 96.7. The NRA said that while same-store sales and traffic indicators were in the plus column in March, labor and capital expenditures continued to lag, which contributed to the Current Situation Index’s score of less than 100.

About 43 percent of operators reported a net increase in same-store sales between March 2009 and March 2010, an increase from the 28 percent of operators who said sales had risen in February. Only 36 percent of restaurateurs said same-store sales declined in March, compared to 57 percent who reported negative sales in February.

In addition, foodservice operators said they saw an increase in customer traffic in March, the first time that indicator has been positive in 31 months. The NRA said 41 percent of operators reported a rise in customer traffic between March 2009 and March 2010, up from 25 percent who said customer traffic was higher in February.

The NRA also said restaurateurs reported a moderate increase in capital spending for the month of March, with 36 percent of operators saying they made a capital expenditure for equipment, expansion or remodeling during the last three months. That figure is up from 30 percent in February.

The Expectations Index, which measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions, was 101.9 in March, up 0.5 percent from February. That rise marks the highest level in nearly three years.

The RPI, which is based on responses to the NRA’s Restaurant Industry Tracking Survey, gauges the health and outlook of the foodservice industry on a monthly basis through such indicators as traffic, labor and capital expenditure.

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