Wednesday, August 8, 2012
After Chick-fil-A Success, Papa John's Attacks Obamacare in Effort to Boost Sales
The fast food industry has entered an unprecedented slump. McDonald's reported the worst drop in revenues since 2003. Burger King Worldwide Inc. and Wendy's Co. are also struggling to keep their already flat profits from further stagnation. Unfortunately, they have yet to identify a frightening conservative hot button.
Schnatter, a supporter of and fundraiser for Mitt Romney, warned investors that if all the provisions in the president's health care overhaul go into effect as scheduled in 2014, "we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders' best interests. We need to prove the point that access to health care is killing the country. From now on, we'll be leaving a horrible taste in our customers' mouths, and it won't be because of our awful food."
Schnatter estimated the health care law would drive up the price of each pizza by 11 to 14 cents. Factoring in overhead and operating costs, he calculated the total increase to range from 15 to 20 cents per order. "In this economy, who can afford to spend another 20 cents on a pizza?" Schnatter asked.
Burger King, McDonald's, Quiznos, and Dunkin' Donuts also expect Obamacare to hamper their businesses. McDonald's said the new health care law would cost each of its 14,000 franchises between $10,000 and $30,000 annually. "I don't understand why the government is punishing our industry," a McDonald's spokesperson said. "How are we related this issue? It's not as though we increased the need for health care."
The biggest issue for these enterprises is the mandate that companies employing over 50 workers provide health insurance.
"First of all, you've got First Lady Michelle Obama out there telling Americans to eat healthy and make better food choices," Schnatter told investors. "She even did away with the food pyramid and replaced it with a healthier chart. Then, every day it seems, you find her at a middle school powering through dietary education presentations and calisthenics. That's turning informed middle class Americans away from pizzas and tacos and burgers. That's hurting shareholders and destroying the economy. Now, the Obamas are making me pay for health insurance for my workers. Do they have any idea how much it's going to take out of my pocket to make sure my employees can see a doctor if they get sick while they're preparing food? And people who work at fast food places tend to eat that food. That's just increasing the risk of diabetes, obesity, heart disease, and probably cancer. So, in our line of work, the medical costs could be a lot worse than for someone who bags groceries at Trader Joe's."
Schnatter also made investors recall the last time prices at Papa John's spiked, when he was forced by "socialist government goons" to maintain sanitary food handling conditions, and to register and insure his delivery vehicles.
For millions of Republican consumers, Papa John's just might replace Dominos as their preferred restaurant. When Tom Monaghan operated Dominos Pizza between 1960 and 1998, his religious extremism was a huge draw for fear-based, conservative Christians who understood that Christ's message of humility and humble means applied only to those who couldn't afford otherwise. Monaghan sold Dominos to Romney's Bain Capital, further endearing it to conservative voters. However, since Monaghan's role in the company diminished, so too did the message. Schnatter now seems to have emerged as the GOP's next pie-tossing darling.
But McDonalds, Wendy's, Burger King, and others worry that they'll be left in the lurch if they don't come up with a contentious political position soon.
Insiders at the National Restaurant Association revealed that McDonald's marketing teams are analyzing the impact of demanding proof of citizenship prior to ordering a meal. They may also drop the "Mc" and go by the name "Donald's," with hotelier Donald Trump as the new clown mascot. Borrowing from Wendy's "Where's the Beef" campaign, The Donald will be asking patrons, "Where's the birth...certificate?"
Burger King is considering a discounted value menu with reduced sales tax for those diners who can prove they make over $250,000 a year in income. The difference would be applied to the checks of other customers in line behind them.
Wendy's is considering re-branding its image to depict Wendy as a happy homemaker content to cook the food and wash the dishes while her male manager stands over her smiling. Marketing teams there also considered making french fries a mandatory item with all purchases, indicating on the menu "Pro Fries. It's Not a Choice."
(c) 2012. See disclaimers.