When the founder of Papa John’s decided to blame the NFL for his sagging sales, he was met with some pretty heavy hits from other pizza players in the market. Both Domino’s and Pizza Hut (arch-enemies, BTW) came out in response to dispute the claim.
Now we have another food service put blame on the NFL and the league’s declining ratings for sales woes — Sanderson Farms, Inc. The chicken wing company’s CEO made claims that their long run of high wing prices has ended because of waning interest in the league. A little examination of this claim sure makes it hard to take seriously.
Let’s start with some facts.
Full-service restaurants have been seeing significant traffic declines for the past 24 months. This has been the case as wing prices have been elevated to new heights. This is a bad combination for a food processor that is dependent on the traffic of those restaurants. So, the declines in traffic coupled with rising chicken prices eventually will lead to lowered consumption of wings. Whether that consumption is lowered due to less traffic or the demand dropping due the price increases is the $1 million question.
We have already seen chain operators like Buffalo Wild Wings asserting their marketing to convince consumers to switch from traditional wings to boneless wing tenders. That is the nature of increased prices when a business doesn’t want to raise their prices in line. The operator will promote substitutes that are more profitable to ensure they maximize their own bottom line. That means another potential reason for the declines is simply people trading away from traditional wings.
Now we can’t deny the fact that interest in the NFL has declined significantly during the last two seasons. That begs the question, why weren’t you complaining about this issue last year?
For John Schnatter, the reason was totally political. He took a swipe at the NFL with no evidence the league’s handling of the protests caused his sales to drop; it was politically convenient use the NFL as his scapegoat.
One thing’s for sure, full-service restaurant operators don’t have time to be distracted with the nonsense of folks making excuses for why their business is suffering. If wing prices go up, then consumption at some point will go down. It’s Econ 101 and can’t be dismissed because it’s expedient to blame others.
Who would blame an operator for de-emphasizing traditional wings when their prices have exploded? Let’s be honest: what goes up, must come down. Sanderson Farms is just a victim of gravity and nothing else more nefarious.