The Drive-Thru: Kroger chaos, Wendy's ghost kitchens, and KFC's chicken wings
Hello from The Drive-Thru, Business Insider's weekly newsletter covering everything you need to know about shopping, fast food, and more. I'm Kate Taylor, and I cover restaurants as a senior
You can sign up to become a Drive-Thru subscriber here to get a rundown on what the largest retail companies in the world are up to. Plus, I'll break down how these decisions impact everyone from Wall Street to grocery-store cashiers.
Kroger layoffs spark fear and chaos.
Every week since I launched this newsletter, the top story has been how corporate restructuring has made the lives of in-store workers miserable. This week, Kroger is following in Target and Lowe's footsteps.
After breaking the story that Kroger was restructuring, Hayley Peterson talked to 11 workers about what the changes will look like. So far, workers are reporting chaos and uncertainty. According to one employee, the hundreds of workers affected by the changes were told one of four things: they would be laid off, fired, transferred, or demoted.
"I was in shock," said the employee, who said she expected the change to wipe out a third of her annual income. "I just wanted to get out of that meeting, go to my car, and call my husband and cry."
In 2017, Kroger launched a transformation plan called "Restock Kroger," aiming to boost online grocery sales and improve profitability. Last month, the company announced it wouldn't hit its three-year target of $400 million in incremental operating profit.
Kroger and other corporate "restructuring" efforts often mean swapping full-time positions for part-time shift jobs. A new report from the Shift Project at the University of California reveals how dangerous this can be for workers. A survey of 30,000 retail and food service industry workers found that two-thirds said they have less than two weeks' notice of their shifts. One in three went hungry or relied on free food because they couldn't afford to buy their own.
Read the full story on Kroger's restructuring here. If you have tips or a story to share about corporate restructuring, email email@example.com.
Sears and Kmart are closing at least 121 stores by January.
Hayley has also been hunting down exactly how many more Sears stores are closing. The answer: at least 121.
That means that there will be fewer than 300 Sears and Kmart stores left after the holiday season. When Transform Holdco bought Sears out of bankruptcy in February, the company had roughly 400 Sears and Kmart stores.
Since August, Transform Holdco hasn't been announcing these closures (thus, the hunting from Hayley). The only way to figure out if Sears is closing even more stores is via company filings, local media, or simply calling up stores and asking if they're shutting down.
Ghost kitchens are taking over fast food.
In fittingly spooky news this October, chains are buzzing about ghost kitchens.
A ghost kitchen - sometimes called a dark kitchen - is a location that purely functions as a delivery business. In some cases, this kitchen can be shared by multiple chains. Kitchen United uses that model, recently raising $40 million in Series B funding to build more commercial kitchens that serve as a delivery location for 10 to 15 different brands.
Wendy's, Chick-fil-A, The Halal Guys, and Sweetgreen are jumping on the ghost-kitchen bandwagon. Since restaurant executives are obsessed with talking about delivery and tech, I'm predicting the ghost kitchen trend will continue long after the Halloween decorations come down.
Barneys New York has a tentative deal to sell its remaining assets to Authentic Brands Group and investment firm B. Riley Financial for $271 million. According to court documents reviewed by Business Insider's Bethany Biron, the deal calls for the closures of the seven remaining Barneys - including its flagship Manhattan location.
The deal isn't final yet, but it reveals how the mighty of luxury retail have fallen.
If you're mourning the potential closure of Barneys' flagship store and need to live out your Carrie Bradshaw fantasy before its potential closure, scroll through Shoshy Ciment's store tour.
Shoshy visited the flagship store in July, right after Barneys filed for bankruptcy. The empty space and mobs of sales associates were a significant departure from jam-packed dollar stores. While this experience may have seemed delightfully decadent at one time, Shoshy classified it as "wasteful" - especially as there were few customers to enjoy the placid shopping scene.
Taste test of the week.
We tried KFC's new wings, and they were not great. I mean, look at my face!
Irene Jiang's take: "We like wings, but we're not sure about KFC's wings. The chain's new creations are generally hit or miss, and this one was a definite miss."
Everything else you need to know:
- Chick-fil-A is facing more backlash over donations past and present. The facts are a bit more complicated than viral tweets make it seem. Here's my attempt to break things down.
- Despite backlash, Chick-fil-A is our readers' favorite fast-chain by a mile.
- Read Áine Cain and Rich Feloni's full conversation with Dick's CEO Ed Stack.
- I admit I have Instagram-stalked Glossier and Rent the Runway's summer camps. Bethany did the same, but in a professional way and put it in an article so you can Insta-stalk as well.
- Under Armour made spacesuits for Virgin Galactic and they look like knock-off "Star Trek" garb.
- Millennials seem to hate everything, but they LOVE massive rolls of toilet paper.
- Panera's mac-and-cheese prep went viral on TikTok and I got annoyed because basically every other chain is doing the same thing without getting in trouble.