NEWSLETTER
Restaurants have received success in recent years with the increase in food costs that harm their margins already adjusted, and several big names have succumbed to bankruptcy as a result.
Food wholesale prices increased annually in December 2024, according to the National Restaurant Association. But the days of casual restaurants that can pass growing costs to customers can be behind us.
Do not miss the movement: Subscribe to the free newspaper of Thestreet
In his vacation perspective of 2024, PWC discovered that consumers are becoming more selective in their expenses, with 55% seeking to reduce the departure in the next six months.
Related: Another great franchisee of the pizza chain presents chapter 11 bankruptcy
Persistently high inflation has forced many consumers to rethink their priorities. And with restaurants prices 3.6% annually, according to the December consumer price index, in the coming months, we could see a change towards food preparation at home.
Image and colon source; Joe Raedle & Sol; Getty images
Freá competition in the Mexican restaurant space
At a time when consumers may not be so fast to spend their money, supersaturation is a problem in any market. And is certainly affecting Mexican restaurants nationwide.
Related: The bankruptcy restaurants chain sells or closes its remaining locations
Several casual Mexi chains continue to dominate the market. With an estimate of 3,636 store footprint, according to the Scrapehero data company, Chipotle (CMG) Continue dominating. Other great players such as Qdoba and the grill of the southwest of MOE, with 757 and 628 locations, respectively, have squeezed chains with smaller store counts.
In 2024, the casual chain Tijuana Flats declared bankruptcy and is now launching a menu image change in an attempt to recover steam. And Uncle Julio, another casual Mexican chain, has also faced his share of financial challenges.
In March 2024, the Lincoln Park of Uncle Julio, the Chicago store, closed abruptly, citing the increase in rental costs such as reason. And many feared that the beloved chain would continue to pass the locations.
Restaurant Giant Sun Holdings acquires Uncle Julio's
Sun Holdings, which already maintains a diverse portfolio of fast service restaurants, or QSRS, recently acquired almost all the assets of Uncle Julio through his affiliate, the next restaurants, in a mortgage execution auction. The agreement occurred more than six months after Sun Holdings bought Uncle Julio's debt with a discount on the secondary market. Uncle Julio never declared himself in bankruptcy.
More restaurants:
- The Popular Banking Restaurants Chain Download Successful Locations
- Previously in bankruptcy of the hamburger chain rescued by fast food rival
- The old craft beer chain in bankruptcy adds locations after closing
The acquisition, which took place in December 2024, is aligned with the Sun Holdings strategy to strengthen its support point in the Mexican casual space.
Through its affiliates, Sun Holdings already operates Taco Bueno, a Mexican fast service chain. Freeebirds World Burrito also acquired a casual fast chain known for its customizable burritos, in August 2024.
“Uncle Julio is an iconic brand with a historical legacy and a loyal follower,” said a Sun Holdings spokesman. “This acquisition reflects our continuous commitment to identify opportunities where we can combine operational excellence with strategic growth to offer value to customers and interested parties equally.”
The company said it intends to use its “extensive resources, operational experience and leading capacities in the industry” to position Uncle Julio for long -term success. The informal chain can benefit from the use of Sun Holdings shared supply chains, which could help address financial pressures that have been affecting restaurants in recent years.
With this acquisition, Sun Holdings now has an excellent opportunity to distinguish its brands and forge a niche for each restaurant chain that it has at a time when consumers are being more chosen. And visit the Uncle Menu Julio can be a movement that is worth contemplating at a time when Mexican casual food has become more and more easy to achieve.
An area in which to focus could be Uncle Julio's drink, which presents the selection that one would expect: a handful of margaritas with some creative additions. An incursion on Tequila and cocktails flights could help Uncle Julio emerge as a more adult and sophisticated player in the Mexi Casual space.
And at a time when consumers seek more and more non -alcoholic alternatives, the chain could also seek to expand their offers without liquors that, at this time, are limited to three modest options.
Menu renovations have been a popular strategy for restaurants in recent times. A review of the Julio Uncle menu could lead to constant growth for the chain and help ensure its place as an informal polished dining room.
RELATED: VETERAN FUND MANAGER ISSUE TOD S&P 500 WARNING FOR 2025
