Margin pain on the menu: Restaurants could get squeezed this year from a combination of higher commodity costs and frugal consumers. Though traffic is forecast to rise 3%, the average ticket is expected to decline 4.7% with coupons, promotions, and discounts gaining favor. Chains that are expected to ride out the expected tough environment are those that can deliver healthy food fast. Chipotle (CMG), privately-held Subway, and Panera Bread (PNRA) fit the bill.
Stocks to watch: McDonald’s (MCD), Jack-in-the-Box (JACK), Sonic (SONC), Cracker Barrel (CBRL), Buffalo Wild Wings (BWLD), Wendy’s (WEN), Burger King (BKW), Chili’s & Macaroni Grill (EAT), IHOP and Applebee’s (DIN), Ruby Tuesday (RT), and Bob Evans (BOBE).
Via Reuters and Seeking Alpha.
Clark Schultz Blog 