Viewpoint — August 2008
Alas, There Is Some Good News!
Written by Bob Gershberg, Managing Partner Dick Wray Executive Search
In the wake of the Bennigan’s /Steak & Ale Chapter 7 filing and continued troubling news from Starbuck’s, some particularly encouraging results have appeared as the industry reports second quarter results. Please note our monthly financial update displaying 22 green arrows up compared to 7 red arrows down. Now that is a much prettier picture than we have seen in some time.
Famous Dave’s revenue was up 15.6% with profits up 6.2%. Bruegger’s boasts the 17th consecutive quarter of sales increases – revenue up 11.3%. Wingstop is boasting as well – 20th consecutive quarter of comp sales increases. Chipotle’s profits were up 22.5% on 7.1% same store sales increases. Panera’s revenues were up 27%, net profit up 24% with same store sales up 6.5% for company units. And Buffalo Wild Wings takes the gold with a 46% increase in profits with same store sales up 8.3%. Heartening news as we struggle to recover from difficult macroeconomic and industry related pressures.
The fast casuals are holding up best as we have predicted for the past year while our casual dining brethren suffer the greater and longer lasting pain. 'These restaurants share many subtle and complex challenges that extend beyond this difficult economic climate,' says Ron Paul, president of Technomic. 'To some extent, they've become victims of their own success-a mature category with too many units and not enough differentiation, at least in the eyes of consumers.'
According to Technomic, the top 20 casual dining chains had unit growth of 45 percent during the most recent five-year period, well beyond the growth in demand. Excellent execution in food quality and service, and the ability to convey a strong price/value perception with consumers, regardless of the total amount spent will be the differentiating factors that produce success for this segment.
All the best,
Bob Gershberg |Managing Partner|
bob.gershberg@dickwray.com
(888) 875-9993 ext 102
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