Quiet but insistent change is coming over the Fast Food Sector. We’ve just heard about another well-known chain that’s closing hundreds of ‘underperforming’ locations as part of a major restructuring and renewal campaign. This time it’s Jack In The Box…
Far from throwing in the towel: JITB last year released this
AI -enerated pic of its ‘Resto of the future’ concept…
Jack is following in the footsteps of moist of the major Fast Food Chains and making big changes to meet the challenges of the mid 21st Century. JITB has just announced plans to massively revamp its store roster, closing hundreds of ‘underperforming’ locations, streamlining the menu and making business model changes to save money.
Not closing the chain!
Fans and industry observers went bananas after hearing what sounded like a similar announcement from Chipotle’s a couple of weeks or so ago. Amazement swept the fast Food sector when it appeared the notorious Tex Mex chain was planning to shut down. What a shame that would be after all the blood, sweat, toil and tears that went into its rejuvenation over the past half decade!
It turned out to be a tempest in a taco shell – an error in translation of a Spanish-language story about a small, experimental fresh-eating spinoff that Chipotle ran for a couple of years before closing last year.
At least Jack managed to make his upgrading and modernizing announcement without fans rushing to the social media platforms screaming – prematurely – that the chain was preparing to seek bank-ruptcy protection.
JITB is definitely NOT on the verge of closing. But the chain has committed to closing as many as 200 of its existing stores over the next 12 months…
Bold plans
JITB’s CEO Lance Tucker told investors in a tele-conference last last month, that the chain will be shuttering as many as 200 locations as part of a campaign to, “help improve the long-term financial success of the company.”
The action plan was unveiled following a report that JITB’s sales slumped 4.4 percent in 2024.
“Jack In The Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” Tucker explained. His overall strategy is to shutter the underper-forming (read: ‘money-losing’) locations as a way to, “return to simplicity for the Jack in the Box business model and investor story.”
In fact. the chain will close 80 to 120 restaurants by the end of this year, and another 80 or so next year, as existing store leases run out or can be renegotiated.
Sale or merger not out of the question.
Nevertheless, Tucker also told shareholders, the board is selling to consider selling the chain if the right offer comes along. JITB’s parent company Del Taco is also struggling to boost sales, reporting a drop of 2.6 percent in sales last year. And it, too, could be up for sale – if the price was right.
My take
What a shame to (worst case) see both Del Taco and JITB disappear from the Fast Food landscape! But it could, apparently happen. And they’re not alone…
It’s all part of what I predicted as far back as 10 years ago: a major shakeout of the overcrowded Fast Food sector right about now – in the mid 2020s. The top-tier brands survive, and the lesser names would either merge with the leaders or simply close their doors altogether.
At last count, I tallied as many as half a dozen smaller chains ‘in play’…
~ Maggie J.