Disney reducing food portion sizes, then added “which is probably good for some people’s waistlines.”

[a1tinkfans]

Say what it really is… GREED/$$$ guided as caring but displayed as fat shaming which is DISpicable on every level
DISNEY, Do Better!

 

[OKW Lover]

Say what it really is… GREED/$$$ guided as caring but displayed as fat shaming which is DISpicable on every level
DISNEY, Do Better!

Its the proper function of business. Make money for the owners. Do that by maintaining growth in earnings over a long term basis.

 

[PepperjackDragon]

Its the proper function of business. Make money for the owners. Do that by maintaining growth in earnings over a long term basis.

Long term basis. That is the real question here. Are all the changes made recently short sighted or actually beneficial long term. I think they are going too far personally but really that doesn’t have much to do with dealing with short term supply chain issues. Obviously if food costs make a short term spike in cost Disney has some generous portion sizes-so it’s really an easy decision imo.

 

[GreatLakes]

Long term basis. That is the real question here. Are all the changes made recently short sighted or actually beneficial long term. I think they are going too far personally but really that doesn’t have much to do with dealing with short term supply chain issues. Obviously if food costs make a short term spike in cost Disney has some generous portion sizes-so it’s really an easy decision imo.

Are you talking about this specific decision or the increased cost in general? This decision makes sense and with the current food costs I think it is a smart decision. Personally I think the increased costs will have a long term negative effect that Disney will start to see in a generation. If less and less people can afford to go to the parks with young kids those kids can't fall in love with the parks and repeat that cycle with their own kids.

I went to WDW as a kid and got hooked which is why we go now and take our child just about yearly. Had I not gone as a kid and had that love of the parks ingrained in me it is unlikely I would go as often now. At the current pricing it is unlikely we would have been able to afford to go when I was a kid. I feel that in 20-25 years there will be less hard core fans than there are now based on this lack of access for so many more people that there was in the late 80s and early 90s. We will see if it plays out.

 

[bsmcneil]

Another day, another over reaction on the internet.

The subject line on this thread is incorrect. The off-the-cuff comment by the CFO only said that they would be looking at all opportunities to reduce costs across the company, including portion sizes. They did not say they were reducing portion sizes.

The comment came up in response to a question by an analyst. When preparing for analyst calls like this one, management will certainly have some prepared remarks. They will also try to anticipate questions that could be answered. But its real life and you can't cover everything in your preparation.

Here's the thing. Professionals are trained to not make mistakes. A school principal, or owner of a local grocery store chain - they say something like this in an official meeting and (for good reason), people are likely to say, "That was a problem. Don't do that again. It reflects poorly on you, and the larger group you represent." A Lt. Gov says this somewhere and (for good reason), media are likely to pick up the story and the lesson from it should be, "That was a problem. Don't do that again."

The CFO of major US and global company makes the comment in an official setting where no one asked her to comment on waistlines and so she really, easily could've stayed on message without this - they should hear the message, "This was a problem." It's a problem because, truthfully, people on a vacation message board shouldn't really need to care what the CFO is saying on an quarterly earnings call - the point is to be truthful while also trying to make your company money.

Beyond the really, really poor lack of judgment it showed from someone who should be in the upper echelon of business (you say "its [sic] real life" and therefore someone should be overlooked but really if this person is this bad on their feet, they shouldn't be making decisions at that level) - it's also just a crappy thing to spread in our society. First, had the person said, "Good for some of our waistlines" or "Good for all of us" - at least they could've made a plausible case for, "I was speaking for myself". But they didn't even do that! "Some people's" - it is a condescending phrase that automatically separates the speaker from those about whom she's speaking. And I don't think any advancement in an individual's health, or the public's overall health, is going to come from focusing solely on waistlines (which are not the single greatest predictor of good health).

 

[eandt]

If she had said it might be good for 'everyone's' waistline it might be a joke. It was the "some people's" waistline.

Perception is key not Intention.

Either way it was in poor taste and not an appropriate venue to be a comedian.

Poor taste perhaps but where is the lie? With that said Disney cutting down on portion sizes has zero to do with anyone's waistline and everything to do with Disney's bottomline.

 

[eandt]

Are you talking about this specific decision or the increased cost in general? This decision makes sense and with the current food costs I think it is a smart decision. Personally I think the increased costs will have a long term negative effect that Disney will start to see in a generation. If less and less people can afford to go to the parks with young kids those kids can't fall in love with the parks and repeat that cycle with their own kids.

I went to WDW as a kid and got hooked which is why we go now and take our child just about yearly. Had I not gone as a kid and had that love of the parks ingrained in me it is unlikely I would go as often now. At the current pricing it is unlikely we would have been able to afford to go when I was a kid. I feel that in 20-25 years there will be less hard core fans than there are now based on this lack of access for so many more people that there was in the late 80s and early 90s. We will see if it plays out.

Agree with you. We were just there and I believe there was a marked decrease in young families in attendance. Granted we spent most of our time in Epcot (F&W) and HS and the time of year being close to the holidays perhaps is a bad time for travel with kids as well as the virus being a factor but to me it was noticeably less young (and old for that matter) this year. Seemed like mostly 30 somethings to 60's singles/couples this time. If this is a trend and younger kids are not being exposed to the "magic" due to costs or whatever factors it could mean trouble down the road for attendance.

 

[jjb1974]

Its the proper function of business. Make money for the owners. Do that by maintaining growth in earnings over a long term basis.

You can make money and not make people feel like you are going out of your way to take things from them. It's not difficult to do.

 

[disneyseniors]

I agree that being exposed to WDW at a young age should cement the magic of disney into them.
However, we took our kids at ages 5 & 7 and 9 & 11. They had a great time but weren't begging to go back. That was my husband and me, LOL. Since we no longer have "kids" at home, we found we loved going to disney once a year, or more. But no more, as the magic of disney has been depleted for us, along with our nostalgia.
Our kids/ grandkids don't care about going to disney at all. If we went, sure, they might meet us for a few days but that's it. They like tropical island vacations more and exploring the USA and the parks. I don't know if they are typical of most kids/grandkids or not.
So I think it's already happening for some families. I can see it becoming a problem for disney later on, if they even care? I don't know what their "end game" is by all this cutting and the myriad of other things they have done. Maybe they want to sell it off, or make it like 6 flags, I just don't get why they are doing all this, except for the money of course.

 

[OKW Lover]

For those who haven't read the actual transcript, here is the relevant portion excerpted from the Motley Fool website

Michael Nathanson -- MoffettNathanson -- Analyst
Thanks. Hey, Tammy. I have two. One is, I appreciate your view that the content cycle will get better, and it will drive sub growth, but I really want to focus on the U.S.
What do you see confidence that that's what is the reason for the slowing growth? And are there any cohorts, any demographics that you're underpenetrated, and perhaps the widening out of content is an issue versus just more new content? That's one. And then, two is, we have covered Disney a long time, but I've never seen this much inflation before. I don't think any of us have in 30 years. And I wonder, how will you mitigate that inflation? And at what point you'd start becoming a more meaningful drag on the margin recovery that you've identified?
Tammy Munsey -- Vice President, Investor Relations
Thank you, Michael. Bob, how about if you talk about the Disney+ sub growth in the U.S. and Christine can talk about inflation.
Bob Chapek -- Chief Executive Officer
<snipped Bob's comment as not relevant to the quote>
Christine McCarthy -- Senior Executive Vice President and Chief Financial Officer
Thanks, Bob. Michael, I think you asked a question that's on the minds of every CFO and every senior management team of companies out there. Inflationary pressures are something we are all looking at and trying to assess and think about how do we manage through it. This is also one that -- I'll just mention, we've already experienced in some parts of our business.
So over the past year or so, we've talked about the increase in the price of content. You see the content that, because of just the competition for talent, for everything that's involved in productions, content costs have gone up. Where we see it directly in our parks business is primarily through the hourly wage inflation that we've seen through contract renegotiations and our commitment to paying our park workers well. And then, we have things on the cost of goods side.
And it's interesting. Just last week, maybe it was -- yes, just last week, I was talking to our parks senior team about things we could do there. And there are lots of things that are worth talking about. We can adjust suppliers.
We can substitute products. We can cut portion size, which is probably good for some people's waste lines. We can look at pricing where necessary. But we aren't going to go just straight across and increase prices.
We're really going to try to get the algorithm right to cut where we can and not necessarily do things the same way. As I mentioned, we're also using technology to reduce some of our operating costs, and that gives us a little bit of headroom also to absorb some inflation. But we're really trying to use our heads here to come up with a way to kind of mitigate some of these challenges that we have. But it's a great question, and I'm sure it's one that you could ask every single company in your coverage universe.

I'm not seeing anything nefarious in these comments. Note that she doesn't say that they are cutting portion sizes. Its only an example of the types of actions they could do.

 

[mlayton14]

For those who haven't read the actual transcript, here is the relevant portion excerpted from the Motley Fool website
I'm not seeing anything nefarious in these comments. Note that she doesn't say that they are cutting portion sizes. Its only an example of the types of actions they could do.

It’s called being tone deaf, what person on vacation wants to be told that Disney execs may want to help some folks reduce their waste size , when the truth is the motivation is for Disney to save money - what a fool this so called exec is

 

[The WDW 3]

The comment was stupid. Absolutely idiotic.

But, what I care about is, when is the dining plan going to come back and what will I get for it??

 

[mlayton14]

The comment was stupid. Absolutely idiotic.

But, what I care about is, when is the dining plan going to come back and what will I get for it??

In an effort to reduce “some” people’s waste lines , Disney will no longer include anything but apples and oranges in the new $100 per person per day dining plan snack entitlement - for the benefit of our customers of course. Trust us , it has nothing to do with our profit margins.
Sincerely,
Christine M. McCarthy

 

[mefordis]

Last I checked, people don't go to Disney to lose weight.

I agree. She could have said because the portions are typically oversized, they can stand to cut them and save the company some money. I don't think many people would disagree with that. Instead she kind of stuck her foot in her mouth and she probably won't live it down.

 

[mefordis]

The comment was stupid. Absolutely idiotic.

But, what I care about is, when is the dining plan going to come back and what will I get for it??

Probably smaller portions.

 

[zebrastreyepz]

Its the proper function of business. Make money for the owners. Do that by maintaining growth in earnings over a long term basis.

Some of y'all say "It's business" like that makes some of this behavior OK. LOL

 

[Ikaikalani]

Has anyone from Disney stepped up and apologized for this statement?

 

[jjb1974]

I don’t buy for a second that Disney doesn’t secure its supplies for at least a year in advance, both prepared and raw materials, to minimize market fluctuations.
This is all spin. I won’t be thanking them for reducing portion sizes and holding prices steady, it’s a de facto price rise, as they won’t be increasing quality in any way.
You’ll still get a gray burger, just 2 less ounces of it and 14 less fries.

 

[RamblingMad]

I agree. She could have said because the portions are typically oversized, they can stand to cut them and save the company some money. I don't think many people would disagree with that. Instead she kind of stuck her foot in her mouth and she probably won't live it down.

This will be under the rug in a couple of months. I'd expect smaller portion sizes and higher prices in the future.

 

[Jrb1979]

Has anyone from Disney stepped up and apologized for this statement?

Nope. Why would they? As they said on today's show, as much as people are upset about it they continue to fill the parks. Til that changes, they will continue to do what they do.