A&W (TSE:AW.UN) was once known for “all-American food.” If you expand that definition to “North American,” then it might still be valid, as it’s largely a Canadian operation these days. And it gained modestly in Monday morning’s trading after reports emerged about a new partnership effort that looked to bolster its presence in the Canadian market even further, though it still has several hundred locations in the U.S..
The deal between A&W and Pret a Manger, a sandwich chain in Europe, has been in the works for the last two years, on an extended trial period. During this trial, A&W restaurants could offer Pret a Manger foods, and there was even a complete Pret a Manger restaurant put up in downtown Toronto.
With the trial period completed to A&W’s satisfaction, Pret a Manger items will go live throughout the A&W chain. This fall, for example, Pret a Manger coffee will be available in all A&W restaurants, and over the course of the next decade to follow, more such offerings will be slotted in.
Building on the Marketing
This move comes at a good time for Pret a Manger and A&W alike. A&W is currently riding a nice wave of cross-promotional opportunity as, just days ago, Blue Bell ice cream released A&W Root Beer Float ice cream, its latest flavor. The combination of vanilla ice cream and “…an A&W Root Beer flavored sherbet…” comes just ahead of summer, which is prime time for ice cream.
Combining these two taste sensations in such a fashion should prove welcome. It also comes at a time when A&W could use the help, as it just lost a restaurant in Vestal, New York. The restaurant, open for around 20 years, ran into staffing problems and simply couldn’t keep its doors open.
Is A&W a Good Stock to Buy?
Turning to Wall Street, analysts have no coverage on A&W Restaurants at all, so we turn to the last month of trading instead. That month has been mostly in decline, with A&W down 2.19% over the course of it. The decline wasn’t all at once, and it did feature a couple of rallies. But these rallies were largely unsustainable, as A&W found itself coming off its lows for the month with that Pret a Manger deal.
