Restaurants

John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, is calling on Starbucks to immediately halt operations and order the closure of its first two stores that have just opened in China's Xinjiang Uyghur Autonomous Region, criticising the decision as immoral. The statement came after Starbucks opened its first two outlets in Urumqi, the capital of Xinjiang, this week, with one located at the Grand Bazaar in the city centre and the other at the city's international airport. In a statement on Thursday, October 1, Moolenaar said this was a shocking and utterly immoral decision for a company that has long championed social responsibility, and that there is no legitimate reason for an American company to do business in a region where the Chinese Communist Party has detained more than one million Uyghurs and stripped them of their freedom of belief, language and culture. Starbucks explained this week through its official WeChat account that the two new stores are not merely coffee shops but spaces offering a new experience that blends local cultural identity with consumer demand. Liu Wenjuan, chief executive officer of Starbucks China, said in the same post that the company remains committed to continuing to invest and expand its business in Xinjiang in the future.

HelloFresh's modelled fair value has been cut to €4.30 from €5.19, a reduction of around 17%, after a round of analyst target revisions narrowed price targets to a range of €2.30 to €3.50. Kepler Cheuvreux upgraded HelloFresh to Hold from Reduce with a €2.30 target, while Deutsche Bank maintained a Hold rating alongside its revised €3.50 target. On the bearish side, Morgan Stanley reiterated an Underweight rating while trimming its target to €3.50, Barclays moved HelloFresh to Underweight and cut its target to €3.10, and JPMorgan maintained a Neutral rating but cut its target to €2.70 from €3.30. The updated valuation assumptions also lowered revenue growth to 0.53% from 2.73% and net profit margin to 0.37% from 0.83%, while the future P/E moved to 26.4x from 12.0x and the discount rate rose to 7.91% from 5.67%.

McDonald's Japan announced on the 1st that it is suspending sales of some hamburgers at all 91 of its locations in Hokkaido through the 2nd, after some beef patties delivered to stores in the prefecture were found possibly failing to meet the company's quality standards. The affected items include 10 varieties such as the Cheeseburger, Big Mac, and Tsukimi Burger. The company is working to secure alternative inventory and expects to resume sales on the 3rd.

McDonald's Japan announced on the 1st that it is suspending sales of some burgers at all 91 of its locations in Hokkaido through the 2nd, after some beef patties delivered to stores in the prefecture were found possibly failing to meet the company's quality standards. The affected items include 10 varieties such as the Cheeseburger, Big Mac, and Tsukimi Burger. The company is working to secure alternative inventory and expects to resume sales on the 3rd.

Starbucks' board approved further steps under the Back to Starbucks plan, including closing about 1% of its North America coffeehouses and recording roughly $300 million in related restructuring charges. The plan also includes Green Apron Service, standardized store scorecards, and a $2 billion cost-savings program through fiscal 2028, and is expected to keep affecting operating margins and earnings as savings and process changes flow through. The company's shares are down about 10.2% on a 30 day share price return and 8.5% on a 90 day share price return, though the year to date share price return is 13.7% and the 1 year total shareholder return is 16.0%. The most followed narrative pegs Starbucks fair value at about $112 per share against a recent $95.43 close, while the stock trades on a P/E of 54.9x, above the US Hospitality industry at 19.1x and a fair ratio of 33.1x.

McDonald's plans to spend roughly $8.5 billion to support its franchisees over the next decade, funding restaurant modernization, operational improvements and a menu rethink aimed at higher-protein options and more flexible portion sizes, and its shares fell 6% in afternoon trading after the spending was announced. The menu changes are part of that broader makeover, with McDonald's USA President saying during the company's Investor Day that customers want food that leaves them feeling satisfied without feeling like too much, and executive vice president and global chief restaurant experience officer Jill McDonald saying the chain is looking to add more choice in beef for those seeking more flexibility in portion sizes, such as a burger bowl. The push comes as about 11% of U.S. adults said they were using a GLP-1 medication for weight loss in 2026, up from just 3% in 2024 according to Gallup, and as the U.S. wellness economy reached roughly $2.1 trillion in 2024, the largest in the world according to the Global Wellness Institute. Rival Burger King has committed up to $700 million through 2028 to its Reclaim the Flame turnaround plan and reported comparable-sales growth of 8.5% in the second quarter of 2026, while McDonald's carried roughly $40 billion in debt at the end of 2025 and returned about $7.1 billion to shareholders through dividends and share buybacks that year. McDonald's said chicken is now a nearly $130 billion category growing more than 5% a year, with Chicken McNuggets alone accounting for nearly $15 billion in annual systemwide sales.

Moody's Ratings has revised its credit outlook for Dave & Buster's Entertainment to negative from stable while affirming the company's B3 corporate family rating. The revision reflects persistent operational weakness and execution risk surrounding the restaurant-entertainment chain's turnaround strategy, driven by prolonged same-store sales declines and softer customer traffic. For the 12-month period ending August 4, 2026, debt-to-EBITDA rose to 6.2x from 5.8x a year earlier, while EBITA-to-interest expense compressed to 0.7x from 1.2x. Management is pursuing value-focused marketing, refreshed entertainment options, updated food and beverage menus, and aggressive cost cuts, though Moody's said execution risk remains high as discretionary consumer spending faces headwinds from persistent cost inflation. The agency affirmed the B3 profile on expectations liquidity will remain adequate, with capital expenditures slowing as management shifts toward selective remodels. Moody's said ratings could face further downward pressure if negative same-store sales persist or if debt-to-EBITDA remains above 6.75x alongside interest coverage below 1.25x, while an upgrade would require leverage below 5.5x with a sustained return to positive same-store sales and positive free cash flow.

Eternal Hospitality Group, which operates the yakitori chain Torikizoku, announced on September 11 its consolidated financial results for the fiscal year ending July 2026, reporting revenue of 51.254 billion yen, up 10.6 percent year on year, while operating profit fell 10.4 percent to 2.797 billion yen and net profit dropped 23.4 percent to 1.318 billion yen, missing both the full-year forecasts of 52.801 billion yen in revenue and 3.43 billion yen in operating profit that it had published in March. Same-store sales at domestic Torikizoku locations were solid at 106.7 percent of the original plan, exceeding the planned 103.8 percent, but new store openings in Japan and overseas fell short of plan, and the company was hit by higher selling, general and administrative expenses including store-opening costs and labor costs concentrated in the fourth quarter, as well as widening upfront losses at overseas directly operated stores. It also recorded an impairment loss of 391 million yen on four directly operated Torikizoku stores in Shanghai, China, and other assets as an extraordinary loss. The company nearly halved the operating profit target for the fiscal year ending July 2027, the final year of its mid-term management plan, to 3.078 billion yen from the original 6 billion yen, and cut its overseas revenue target to about one-third, to 2.075 billion yen from 6 billion yen. For the fiscal year ending July 2027, it plans revenue of 57.231 billion yen and operating profit of 3.078 billion yen, achieving growth in both revenue and profit, but the across-the-board price revision from October 1 announced on September 10 was not finalized as of the start of the period and is therefore not included in the forecast.

Starbucks' board of directors approved additional actions under its "Back to Starbucks" strategy, including plans to close about 1% of its more than 18,000 North America coffeehouses that fail to meet the brand's expected customer experience and financial performance standards, with most closures expected by the end of fiscal 2026. The company expects approximately $300 million in restructuring charges, comprising $200 million in cash costs primarily for lease exits and employee separation benefits and $100 million in non-cash charges tied to disposal and impairment of company-operated coffeehouse assets. Starbucks now expects approximately 440 net new global company-operated and licensed coffeehouse openings in fiscal 2026, down from previous guidance of 600 to 650, a revision reflecting about 250 North America closures partly offset by higher net new openings in international markets. The move follows a recent report that Starbucks is considering selling a majority stake in its Japan business in a potential transaction that could value its largest overseas company-operated market at approximately $3 billion. Starbucks shares were up 0.45% at $94.05 at publication on Friday.

Starbucks said Thursday it will close 250 locations, about 1% of its more than 18,000 North American stores, with 36 of those closures falling in Southern California. The Seattle coffee giant is targeting underperforming coffee houses where it does not see a path to delivering the customer experience or long-term financial performance it expects, Chief Operating Officer Mike Grams said in a letter posted on the company's website. The company has already closed more than 600 stores in North America and Europe and laid off hundreds of non-retail employees as it battles increased competition and slowing sales under Chief Executive Brian Niccol, who took over in 2024 and enacted a turnaround plan. In July, Starbucks reported global comparable-store sales up 7.9% for the fiscal third quarter versus last year, with North American store sales up 8.1%. Starbucks did not list the locations set to close, but a spreadsheet compiled by a Starbucks fan known online as Winter, based on locations listed as closed for the coming week in the company's app, includes 36 Southern California sites; The Times confirmed all are no longer listed in the app and are either marked permanently closed on Google or did not respond to phone calls. The company said it will support affected employees with potential transfers, and those unable to transfer will receive severance support.

McDonald's Corporation has lost about 22% of its value over the past twelve months while the wider market rose, as GLP-1 weight loss drugs suppress appetites and reshape fast food menus around smaller portions and higher protein. The company's competitive moat, built on real estate and franchising rather than food, remains intact: it earns an operating margin near 46%, has raised its dividend for fifty consecutive years, and the dividend now yields about 3.3%. The threat is not a rival chain but pharmacology, and a moat built on real estate and franchising offers no defense against customers simply wanting less food. The structure delays the damage rather than preventing it, since fixed property income keeps arriving while franchisee traffic falls, but the royalty half of the income is a percentage of sales and falls immediately. The shares trade near nineteen times earnings, below where McDonald's has typically been valued, and the number to watch is comparable sales in the United States, where a calorie problem shows up before it appears anywhere else.