The Wall Street Journal - 28.10.2019

THE WALL STREET JOURNAL. Monday, October 28, 2019 |B3

country, often in front of gen-

erally full shelves, according

to Field Agent Inc., a Fayette-

ville, Ark.-based company that

enlists shoppers to collect

photos of store conditions.

Having hunted for months

for ingredients, Popeyes Louisi-

ana Kitchen is bringing back its

popular spicy chicken sandwich.

The sandwich is slated to re-

turn next month in what is ar-

guably one of the most highly

anticipated comebacks this

year for a food product.

Popeyes and its owners, pri-

vate-equity-backedRestaurant

Brands International Inc.,

have spent much of the two

months since it ran out of its

new spicy chicken sandwich se-

curing suppliers that could

meet its specifications for

quantity and small breast size

of the item’s poultry, according

to people familiar with the dis-

cussions.

The fast-food chain also had

to ensure supplies for the sand-

wich’s specialty brioche bun,

one of the people said.

Popeyes helped spark the

chicken wars between restau-

rants this summer when it

launched a crispy sandwich in

mid-August.

It was the first time the 47-

cial-media campaign fueled by

snarky exchanges between Pop-

eyes and competitors led to

lines out the door at many of

its 2,400 U.S. locations.

Popeyes said at the end of

August that it had run out of

The hot item hasn’t been offered in months due to lack of fixings. the sandwich. It went through

SCOTT MCINTYRE FOR THE WALL STREET JOURNAL

year-old chain had rolled out a

chicken sandwich nationally,

following two years of testing.

The sandwich features filets

from small-breasted birds,

which tend to be favored by re-

tailers and are in tighter supply

than large birds, the people

said.

Popeyes also has been fo-

cused on costs in its negotia-

tions for the meat, they said.

3G Capital, Restaurant

Brands’ lead private-equity

backer, has a reputation for in-

tense attention to cost control

and bargaining.

Negotiations get tougher

when supplies are low and pro-

ducers have pre-existing com-

mitments with competitors.

Chicken production is high but

so is demand. Servings of

breaded chicken sandwiches

sold in fast-food chains grew

by 4% in the year ending in Au-

gust, according to market-re-

search-firm NPD Group Inc.

Restaurant Brands declined

to comment.

Chicken-sandwich sales at

Popeyes far exceeded the com-

pany’s expectations. A viral so-

a supply intended for three

months in 14 days.

Wall Street analysts have

boosted their sales projections

for Popeyes because of the

chicken sandwich.

The company’s comparable-

store sales for its quarter

ended in September are esti-

mated to be up 5% from a year

earlier, according to analysts

polled by Consensus Metrix.

For the prior quarter, Popeyes

reported a 3% rise in same-

store sales. Restaurant Brands

posts third-quarter earnings

Monday.

Restaurant Brands has come

to view the chicken sandwich

as a major part of the chain’s

international expansion, one of

the people familiar with the

matter said.

The company hopes to ex-

pand its Burger King, Tim Hor-

tons and Popeyes brands to

more than 40,000 locations

throughout the world from

roughly 26,000 today. Asia,

where chicken is popular, is a

focus of the expansion.

—Jacob Bunge

contributed to this article.

BYHEATHERHADDON

Popeyes Chicken Sandwich to Return

Servings of chicken

sandwiches in the U.S.

fast-food market,

change from a year earlier

Note: For 12-month period ending in August

Source: the NPD Group/CREST

8

–8

–6

–4

–2

0

2

4

6

%

2015 ’16 ’17 ’18 ’19

Breaded

Grilled

BUSINESS NEWS

there really a national dish

soap shortage?” asked one ac-

count on Twitter.

Adding to the confusion,

some rival retailers said they

had plenty of soap. P&G wasn’t

pleased, as some at the com-

pany worried the warnings

could exacerbate the problem

by causing a run on the prod-

uct, according to people famil-

iar with the matter.

“There is a national dish-

soap shortage, so the signs are

up for customer awareness,”

said a Walmart spokeswoman.

The signs say shoppers

should expect shortages

through Dec. 1.

There is little indication

that Walmart’s rivals are expe-

riencing a disruption. “We

have no reason to believe that

our dish-soap inventory will

be impacted by any vendor-re-

lated issues,” said aTarget

Corp. spokesman. Several gro-

cery chains, including Michi-

gan-based Meijer Inc. and

Pennsylvania-based Giant

Food StoresLLC, said they

aren’t experiencing a shortage.

CVS HealthCorp. said it is

meeting demand for Dawn.

Walmart and other retailers

occasionally post signs in

store aisles telling customers

about product shortages, but

at Walmart it is usually used

to explain bare shelves to

shoppers or when a shortage

is significant, said current and

former executives from con-

sumer-goods companies and

Walmart. Wet weather during

the growing season led to a

canned-vegetable shortage this

summer, prompting Walmart

to post signs for shoppers on

sparse shelves.

The signs at Walmart were

posted in stores across the

Some stores were noticeably

short on Dawn and Gain.

Any hiccup in P&G’s dish-

soap supply could dispropor-

tionately hit Walmart. Wal-

mart is a larger seller of P&G

products than any other re-

tailer, accounting for 15% of

the consumer-goods com-

pany’s total sales last year, ac-

cording to financial filings.

At the same time, Walmart

often operates with lower in-

ventory on hand than competi-

tors to more efficiently run its

supply chain, said current and

former executives from con-

sumer-goods companies and

Walmart. When there is a sup-

ply snafu it could cause a

larger ripple effect at Wal-

mart.

Hand-dishwashing soap is a

$1.6 billion industry in the U.S.

and is dominated by P&G,

which controls close to 60% of

the market with its Dawn,

Gain and Ivory brand soaps.

P&G, calling the issue a

“short-term inconvenience,”

said the supply snafu is re-

solved and that all soap vari-

eties should be available soon.

A P&G spokesman said the

company wasn’t involved in

the decision to put up the

signs and didn’t specify when

the company expects supply to

return to regular levels.

“We are aware that some

P&G hand-dish products may

be harder to find right now,”

the spokesman said. “For a

brief period, demand exceeded

what we were able to supply,

but this was temporary.”

The spokesman declined to

elaborate on what prevented

P&G from producing enough

soap.

—Jaewon Kang

contributed to this article.

Procter & Gamble Co.

didn’t make enough dish soap,

andWalmartInc. is letting all

its customers know about it.

P&G, which makes Dawn

and Gain dish soap, told retail-

ers in recent weeks that they

couldn’t make enough hand-

dishwashing soap, and that

some varieties might be in

short supply for a time. In re-

sponse, Walmart, the country’s

largest retailer, posted signs in

many of its stores warning

customers of a “national sup-

ply shortage.”

The signs sparked a mix of

concern and confusion. Some

customers posted photos on

social media showing the

warning signs taped to shelves

that were fully stocked. “Is

Walmart making this up or is

BYSHARONTERLEP

ANDSARAHNASSAUER

WalmartPutsDish-SoapBuyersinaLather

Source:Euromonitor

*Procter & Gamble †Colgate-Palmolive

Dawn*

Palmolive†

Ajax†

Gain*

Ivory*

46.0%

17.2%

12.0%

8.6%

2.5%

U.S. market share of top

hand-dishwashing-soap

brands, 2018

NY