Restaurant Stocks Go Up
A number of restaurant stocks rose Monday after KeyBanc Capital Markets analyst Lynne Collier said QSRs and high-end casual-dining chains would outperform the rest of the sector. She wrote in a note to investors that the restaurant companies that will excel in a difficult economic environment where labor and food costs continue to rise are those that offer differentiation and a good value. Collier picked Benihana Inc. as the top pick of the sector. Read the full story >>
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I submit the following items for your consideration:
AzCentral — Subject: Big bite of your budget
“Every week, it seems something’s been going up: fruits, vegetables,
meats,” said Mike Gebran, a partner and co-owner of two U.S. Egg
restaurants in Tempe and Scottsdale. “Eggs have just skyrocketed.”
Restaurant owners such as Gebran said he and his partners may have to
boost their prices on menu items soon.[...] “We can’t absorb all the costs,” he said. “Our profit margins have been dipping.”
“Casual Dining Slowdown Continues Into March” –Nation’s Restaurant News
Holiday Bump for Darden Foods/Motley Fool: http://www.fool.com/investing/general/2007/04/09/the-lobsterfest-factor.aspx
“But without that new growth vehicle in plain sight, it’s easy to see why Darden’s share price appears as though it’s starting to flatline.”
Some interesting points:
1. Gas is up in price;
2. We have been having unusually warm weather for a few weeks, and at the same time,
3. Lent started early this year, Easter was a week earlier
4. Ruth’s Chris sales are up, as are other high-end chains
5. The new “Ethanol Economy” is driving up prices of grain, which means that anything made with grain or any protein that is grain-fed will rise in cost.
This is a tricky time to be in the family/casual full-service segment. Many are trading down to avoid full-price menus and tipping. But most luxury chains are doing fine.
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And now a word from Mark Scarp at the Tribune:
http://eastvalleytribune.com/story/87003
April 1, 2007
This ‘Old House’ makes changes in order to thrive
Mark Scarp, Tribune Columnist
With so many places to eat, drink and gather constantly opening and
closing in our fast-growing, fast-changing East Valley, you don’t need
to have lived here long before making subconscious mental notes of
businesses you can count on to “always” be there, even though there’s
truly no such thing….
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