The dynamic of the world economy is changing, and brands that are reluctant to change their ways will be left in the dust, according to former CKE Restaurants CEO Andy Puzder.
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“The world is changing,” he told FOX Business’ Charles Payne on “Varney & Co.” on Friday. “And the restaurants need to react just like other industries.”
Sales and foot traffic declined at many chain restaurants in 2018, and in Puzder’s opinion, they need a delivery push to keep up with the new economic landscape.
“It’s much like in retail,” he said. “Sears is failing but Walmart is doing great. Kmart is failing but Target is doing great. That’s because Walmart and Target adjusted to the new economy.”
Sears, which also owns Kmart, filed for bankruptcy in October and has not turned a profit since 2012.
|SHLDQ||SEARS HOLDINGS CORP.||1.24||-0.20||-13.89%|
In the past, chain restaurants benefited from the convenience provided by drive-through windows, but now food delivery services, like Uber Eats, are in high demand.
“Brands that pick up on that are going to be more successful than brands that don’t,” he said.
Puzder added that smaller niche brands, including Chick-fil-A, In-N-Out Burger and Shake Shack, are doing very well.
Based on recent growth projections, in 2019 Chick-fil-A is expected to surpass Subway to become America's third-largest restaurant chain, behind McDonald’s and Starbucks, according to Technomic’s Top 500 Chain Restaurant report.
Puzder was replaced as CEO of CKE Restaurants, the parent company of Carl’s Jr. and Hardee's, in 2017, several weeks after dropping out of the running for the U.S. labor secretary position that President Trump had nominated him for.