Sonic Operations

storewanderer
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Re: Sonic Operations

Post by storewanderer »

bryceleinan wrote: June 13th, 2022, 1:59 pm
storewanderer wrote: April 5th, 2022, 7:49 pm Is Sonic capable of serving food that is actually hot, and taking less than 15 minutes to serve 3 cars in the drive through?

In Reno area, the answer is NO. And has been for over a decade. I am surprised they are still in business.
Inspire Brands needs to take a look at the Reno stores... went to Carson and all the carhop areas were blocked off, 20 cars in drive through.
I don't think most fast food franchisors care what goes on in Reno at all as evidenced by what I see going on with basically all of the burger chains in this market.

The Minden Sonic is another joke. It opens and closes at random times. It is closed entirely on Mondays and has been for a while. Seems to run with only 2 employees. I think it has been drive through only for quite some time but it doesn't matter, it hardly has any customers.

Also supposedly a new Sonic was supposed to be built in Fernley. I am not sure what happened on the status of that project.

South Reno Sonic is always largely deserted while Raising Cane's across the street will have 20-30 cars lined up and busy inside. I don't like Raising Cane's bland food at all but at least the food is hot EVERY TIME and service is efficient. If Sonic could figure out how to serve a hot chicken strip and hot fries I'd say I prefer their product to Raising Cane's. But since they can't figure that out, have to go with the place that is at least reliable.
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Re: Sonic Operations

Post by Alpha8472 »

The Sonic in Tracy, California seems to have similar problems. There is a shortage of workers, and the food is cold. There are no car hops for the stalls, and the drive thru line is long.

I have noticed some really poorly run fast food places closing on Sundays and Mondays. One example was the Fosters Freeze in Tracy, California. I cannot believe that an ice cream and burger place is closed on Sundays where it gets to be over 100 degrees during the summer.
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Re: Sonic Operations

Post by jamcool »

Apparently no one wants to work in Reno.
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Re: Sonic Operations

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jamcool wrote: June 14th, 2022, 1:14 am Apparently no one wants to work in Reno.
Some chains are staffed just fine. But the ones that struggle to staff are really struggling (it seems centered around the burger chains). The employees are all being taken by warehouses instead which pay significantly higher hourly wages, have sign on bonuses, full time hours (40+ hours), and stronger benefit packages.

Certain fast food chains in Reno have really turned things around in the past five or six months by increasing their starting rate, doing sign on bonuses, referral bonuses, retention bonuses, and other things to retain employees. One chain in particular that was struggling BADLY last year has really turned things around with these programs; it is a large franchise operator with hundreds of locations so they had resources. And they used those resources and turned things around. Menu prices have increased about 15% from where they were 2 years ago but they have stopped various promotions/coupons... and that price increase just took place within the past month... the units can be high volume (if they are open)... didn't take much of a price increase to pay for all of this when it got their volume back, which didn't take long since surrounding competitors still open/close inconsistently.

Most of the burger chains in Reno are still "local" franchisees who seem to have gotten into a pattern of being pretty much in a misery loves company mode. In N Out who is also fully open and has been this whole time is killing them all.
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Re: Sonic Operations

Post by SamSpade »

jamcool wrote: June 14th, 2022, 1:14 am Apparently no one wants to work in Reno.
This is worsening in this part of the country as well, especially at Chipotle. I am no longer going there after three difficult visits in the past several months. Too bad, as I really like the new chicken option they added.
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Re: Sonic Operations

Post by Alpha8472 »

Fast food workers in the San Francisco Bay Area do not last long. There are so many higher paying jobs. My friend's brother worked at a busy McDonald's inside of a Walmart. You are lucky if new employees last a few weeks. He got a job at a 7-Eleven and it pays better. There is less work to do and he says it is a much nicer job than McDonald's.

Gas stations are actually making quite a bit of money these days. People keep buying gas, and they keep going to 7-Eleven. Apparently, this means they can pay better wages than McDonald's and you see better employee retention.
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Re: Sonic Operations

Post by mbz321 »

Alpha8472 wrote: June 15th, 2022, 11:46 am

Gas stations are actually making quite a bit of money these days. People keep buying gas, and they keep going to 7-Eleven. Apparently, this means they can pay better wages than McDonald's and you see better employee retention.
I find that hard to believe given the margins on gas are so thin, and usually extra snacks/convenience purchases are the first thing people will cut back on.
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Re: Sonic Operations

Post by storewanderer »

mbz321 wrote: June 16th, 2022, 7:50 pm
Alpha8472 wrote: June 15th, 2022, 11:46 am

Gas stations are actually making quite a bit of money these days. People keep buying gas, and they keep going to 7-Eleven. Apparently, this means they can pay better wages than McDonald's and you see better employee retention.
I find that hard to believe given the margins on gas are so thin, and usually extra snacks/convenience purchases are the first thing people will cut back on.
Margins have fattened up for gas retailers in recent years. They are really fattening up in the past year for some reason (same thing that is causing prices on everything to go up- everyone in the product chain has decided they want to "get their piece of the price increase"). As I am sure you notice, we are seeing so many new gas stations built and these regional chains able to grow so fast...

Take a look at some earnings reports for the large gas station operators. As the gas station chains have been allowed to merge and turn more corporate, fuel margins have really improved. I have a thread elsewhere where I note in my market Maverik is always first to go up in price then other chains follow then they will adjust back down a bit. This is what is happening in many markets is a single chain has pricing power in the market and gets the margin they want.


Circle K 3/22/22 earnings report: quarterly fuel gross margin 39.63 cents per gallon (up 8.87 cents per gallon over prior year)
Caseys 6/8/22 earnings report: quarterly fuel gross margin 36 cents per gallon (up 3 cents per gallon over prior year)

This isn't the most objective comparison as fuel margins were quite depressed in this period, but:
Now let's go back to 2012. Caseys was reporting a fuel margin of 15 cents per gallon.
Now let's go to 2014 Circle K was reporting a fuel margin of 14.85 cents per gallon.

Now let's not forget the fuel GROSS margin is before, credit card fees. Okay. But there is the next tidbit. There was a recent change in how the intercharge rates are calculated for at least Visa and MasterCard and there is now a MAX intercharge rate on fuel that caps out at somewhere below $2. There is still a ~2% calculation + .05 rate but it caps out right below $2. So that $100 fill up- processing fee is just under $2 and caps out.

Last one- Speedway's fuel margin (last it was reported before 7-Eleven got them; I am sure it is higher now):
5/4/2021 Marathon earnings report: Speedway fuel margin: 25.67 cents per gallon in Q1 2021, and 35.40 cents in Q1 2020
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Re: Sonic Operations

Post by BillyGr »

mbz321 wrote: June 16th, 2022, 7:50 pm
Alpha8472 wrote: June 15th, 2022, 11:46 am

Gas stations are actually making quite a bit of money these days. People keep buying gas, and they keep going to 7-Eleven. Apparently, this means they can pay better wages than McDonald's and you see better employee retention.
I find that hard to believe given the margins on gas are so thin, and usually extra snacks/convenience purchases are the first thing people will cut back on.
Unless at the same time you get others cutting back by buying something while getting gas (say a sandwich/hot dog/pizza or whatever a given place offers), rather than making a separate stop for a lunch (like a McDonalds or similar)?
That would add to the income for the gas station while still being a bit of a cutback for the customer, as those items can be a bit cheaper than what is offered at other options.
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Re: Sonic Operations

Post by Alpha8472 »

McDonald's has increased prices somewhat. Sometimes you can get some good deals at 7-Eleven on hot food. It is a nice change compared to the boring menu at McDonald's. When it is hot a ton of people go in for Slurpees and ice cream. It is a nice treat.
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