Restaurant sector challenges of negative same store sales comparables, consumer unease, rising food commodity costs and some magnitude of increased heath care costs emanating from Obama Care appeared in 2012. The same issues will be present in 2013.
The business press and Wall Street are focusing on signals of quarter to quarter sales momentum. There is no doubt that restaurant sales momentum cooled off from late 2011 and 2012, but its far from a disaster. We have settled into a new normality that is actually closer to 2010-2011 levels.
Customers lined up in Feb, 2010 for free breakfast at a Georgia Denny's
SAN DIEGO – What has emerged from turmoil of free meals and CEO succession in the Denny's chain is a restaurant network that has become the epitome of collaboration between franchise owners and franchisor. That renewed collaboration is helping the chain turn the corner.
In January and early February, we had a lot of restaurant earnings and investor conference news, from YUM (NYSE:YUM), Darden (NYSE:DRI) Wendy’s Arby’s Group (NYSE:WEN), Brinker (NYSE:EAT) and McDonald’s (NYSE:MCD).
Same store sales is an important retail and restaurant metric. It is because of the operating leverage concept, that is, once an incremental sales gain occurs, somewhere from zero to $.70 falls through to the bottom line.