Viewpoint — March 2008
Gimme Some Good News!
Written by Bob Gershberg, Managing Partner Dick Wray Executive Search
“Restaurant stocks soar on strong fast-food reports”, read a Reuters’ headline just 10 short months ago. Chipotle, Buffalo Wild Wings and Yum had just hit all time highs. It appeared that QSR and fast casual would carry the industry while the casual dining gang was slated to struggle. The chains did squeak out a 5% annual sales growth for 2007 but finding positive headlines in ’08 may well prove close to impossible. Same-store sales declines, dwindling customer traffic, oil at $104 a barrel, commodity costs hitting unthinkable highs and forced labor cost increases will challenge all segments.
Ron Paul, president of Technomic, our own Ben Bernanke states, “Whether or not the rest of the economy is in a recession, the restaurant industry certainly is.” According to Technomic, same-store sales at the nation’s largest chains increased only 0.3% in 2007. Whether or not we can beat that meager number in 2008 remains to be seen. The fast casuals will undoubtedly lead the charge.
This list from Technomic shows the growth stars of ’07. I am betting at least 5 of these well-run groups provide some great news for ’08.
Focus on operations’ excellence and you will weather the storm, perhaps even provide for a good headline by year end.
All the best,
Bob Gershberg |Managing Partner|
bob.gershberg@dickwray.com
(888) 875-9993 ext 102
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