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Tag Archives: Nation’s Restaurant News Breaking News

Some positive restaurant industry news from Nation’s Restaurant News’ Breaking News

10 trends to watch in 4Q reports

Restaurants expected to outline higher sales, future price hikes

January 21, 2011 | By Mark Brandau

Fourth-quarter earnings season kicks into full swing next week, and many restaurant companies are expected to report improving sales and profit, said restaurant securities analyst Jeffrey Bernstein of Barclays Capital.

Restaurants also are likely to discuss plans to raise menu prices in 2011 to combat increased commodity costs, he said in a research note Friday.

Bernstein listed 10 items to watch as companies report final results for 2010:

Catch those 10 items, several of which bode well for waiters in all niches here: http://www.nrn.com/article/10-trends-watch-4q-reports?ad=news#ixzz1BmLeXd4S

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Restaurants not jolly about Christmas weekend

From Nation’s Restaurant news:

Restaurants not jolly about Christmas weekend

Many operators fear lost sales because of the holiday’s timing

December 3, 2010

by Bret Thorn

Ben Benson didn’t need to look at a calendar to know Christmas 2010 was going to be on a Saturday. Everything seemed to go wrong this year. The economic recovery didn’t happen, the hot New York summer kept him from getting much use of his patio. Why would he expect Christmas to fall on any day of the week but the worst one?

“For the first time in 28 years, we’ll be open on Christmas and New Year’s,” said the owner of Ben Benson’s Steakhouse in Midtown Manhattan.

Read the rest of the article here:

And yes, my restaurant will be open on Christmas and New Year’s Day.
This is probably bad news for Chinese restaurants as well as they’ll have some serious competition for a change.

And yet, not all news is positive for the restaurant industry

Restaurant operators’ optimism wanes

NRA’s Restaurant Performance Index slips in June

July 30, 2010 | By Paul Frumkin

Restaurant operators appear to be less optimistic about their future prospects, which contributed to a decline in the National Restaurant Association’s Restaurant Performance Index for the third consecutive month.

The RPI fell to 99.5 in June, a decline of 0.3 percent from May and the lowest level since February, according to the NRA. It also marks the second consecutive month the RPI has stood below 100, which reflects contraction in the monthly index of key foodservice industry indicators.

Read the rest of the article here:

http://www.nrn.com/article/restaurant-operators-optimism-wanes?ad=news

P.F. Chang’s plans price hike as traffic improves – Nation’s Restaurant News

By Ron  Ruggless

Mother Nature hammers the restaurant sector

A look at industry same-store sales

by Mike Dempsey

And the insanity just goes on and on and on…

Darden sees potential for 1,000 more units

By Mike  Troy

Restaurant earnings: Beyond the numbers – from Nation’s Restaurant News

Restaurant earnings: Beyond the numbers

By Mike  Dempsey

(Feb. 18, 2010) Financial results were mixed this week as a cross-section of restaurant companies reported fourth-quarter earnings. Stalled consumer spending and continued traffic declines plagued top lines, while bright spots included positive earnings growth from cost-cutting moves and favorable comparison to year-ago figures.

Beyond the numbers, companies laid out strategies aimed at combating the sluggish economy and igniting sales and traffic.

Read the rest of the article here:

http://www.nrn.com/breakingNews.aspx?id=379646

The article goes on to list four companies’ results, Darden, the parent of Red Lobster, P. F. Chang’s, which reported a doubling of profit in the 4th quarter of 2009, Denny’s and Jack in the Box. The article explains that there are bright spots in casual dining, while higher end chains still continue to struggle.

Ruth’s Hospitality Group is such a restaurant operator still struggling with profits, although they “cut their losses” in the 4th quarter. According to NRN, they are still struggling with same store sales, falling 11.2%. You can read the whole article here:

http://www.nrn.com/breakingNews.aspx?id=379656

This is a long way from 2005, when articles like this from NRN were legion:

Big high-end steakhouse chains are primed for 10% growth

http://findarticles.com/p/articles/mi_m3190/is_9_39/ai_n13251038/

Most steakhouses have struggled to fill seats and stem bloodletting from eroding covers. Some, like Palm Steakhouse, are expanding to foreign and other markets. Palm has recently opened a London restaurant and is planning several more in Europe and are eying the Pacific Rim. They are also opening Palm Bar and Grill, a micro version of the venerable restaurant, in JFK’s Terminal 4 (slated for opening last month) and, by all accounts, plan more in the future.  Morton’s is reaching even higher, announcing in-flight offerings from their famous brands. They’ve also offered a Filet & Lobster Tail Dinner via Lobster Gram, a full dinner for 2 delivered to your door for $149.00. You still had to cook it, but they tossed in a couple of “signature engraved steak knives” and Morton’s Signature Grilling Salt and clarified butter.  This program, started in November 2008, has since been discontinued. Guess it wasn’t the hit that they hoped for. 

Independent restaurants have also struggled. One ingenious thing that has been done in Nashville is Nashville Originals, an organization of like-minded indie restaurants designed to promote dining locally as well as offering the benefits of increased scale. While it’s been around for several years, it’s still a nascent organization. Its on-line presence is still a bit primitive and the promise hasn’t been fulfilled quite yet. When they first started, there was talk about possibilities like shared purchasing in order to get better prices, but I’m not sure that this promise has ever come to fruition (it’s probably logistically difficult). About the only shared thing that’s really evident other than the occasional press release is a gift certificate that can be used at any of the member restaurants. I hope that they can get some traction, but it looks like the day-to-day challenges of running an independent restaurant are preventing some serious traction. It’s probably like trying to herd a clutch of cats. Here’s their website:

http://www.nashvilleoriginals.com/index.php

As you can see, there’s definitely improvement to be made there.

I’ve noticed that there are such organizations in various communities throughout America. Hopefully, they can offer some benefits that will help indie restaurants through this challenging economic landscape.

Image found at http://positivesharing.com/2006/03/make-your-business-happy-and-rich/

Good and not-so-good news about restaurants in this economy

 

Nation’s Restaurant News has two articles in their “Breaking News” feature that points out the complexities of restaurants dealing with the economic crisis: 

O’Charley’s posts positive guest counts By Elissa  Elan 

NASHVILLE, Tenn. (Feb. 4, 2010) While consumer pressures tied to the recession pushed fourth-quarter sales into negative territory at the three chains of O’Charley’s Inc., its namesake brand and Stoney River Legendary Steaks chain posted their first year-to-year traffic increases in more than three years. 

The company also posted a narrowed net loss of $15.2 million, or 72 cents per share, for the quarter ended Dec. 27, versus a loss of $68.2 million, or $3.34 per share, in the same quarter a year ago. The improvement was mostly because of year-ago charges, when O’Charley’s booked more than $60 million in impairment for goodwill and restaurant closures. 

Latest-quarter revenue declined 6.9 percent to $188.9 million, the result of consumers cutting back on spending, O’Charley’s officials said. The company, which operates or franchises 368 restaurants under the O’Charley’s, Stoney River Legendary Steaks and Ninety Nine Restaurants casual-dining brands, had expected sales of between $190 million and $195 million. 

Read the rest of the article here:
 
Notice that this is a good news/bad news sort of thing. Cover counts are up, but people are spending less. This means that sales are still soft.
 
Also:
 

U.S. restaurant count declines

By Molly  Gise 

CHICAGO (Feb. 4, 2010) The number of U.S. restaurants fell this past fall as the industry continued to suffer from serious declines in traffic and sales. The rate of closures, however, was less than what was reported last spring. 

According to The NPD Group’s ReCount data released Wednesday, the total number of U.S. restaurants declined 0.3 percent, or by 1,652 restaurants, to 578,353 locations in the fall of 2009, compared with the fall of 2008. ReCount tracks commercial restaurant locations twice a year, in the spring and fall. 

Restaurant closures were more severe in the spring of 2009, when the total number of U.S. restaurants fell 1 percent from a year earlier, reflecting the loss of more than 4,000 eateries. 

“NPD’s fall 2009 ReCount reflects a slowdown in chains expanding, and two years of a challenging economy already weeding out the poorest performing restaurants,” said Greg Starzynski, NPD’s director of product development for foodservice. 

Read the rest of the article here:
 
 
So, while there are positive signs, the restaurant sector continues to face challenges, which makes it even more incumbent for waiters to execute at a high level. If you’re seeing more people but less total sales, upselling is more important than ever. As always, upselling shouldn’t be done solely to extract the maximum amount of money from the guest, but should be done to enhance the dining experience. Never lose sight of this basic tenet.
 

More positive financial news for restaurants in 2010

From Nation’s Restaurant News:

Restaurant industry sees signs of light

by Sarah Lockyer

NEW YORK (Jan. 6, 2010) Two recent surveys forecast a slightly sunnier picture for the year ahead among both consumers and franchise business leaders, providing a glimpse of clearer skies for the restaurant industry.

Last week, a key consumer barometer, The Conference Board’s Consumer Confidence Index, showed its second straight gain in two months, with the consumer outlook for the months ahead reaching a two-year high.

The Conference Board, a New York-based research group, said the index rose in December to 52.9, from 50.6 in November. The index is based on a survey of 5,000 U.S. households, and readings above 90 indicate a stable economy and above 100 indicate economic growth. Tracking consumer confidence is key for many restaurant operators, as consumer sentiment is tied so closely to consumer spending, which drives the engine of the restaurant industry.

Read the rest of the article here:

Famed NYC restaurant Tavern on the Green auctions its contents

Tavern on the Green prepares for auction By Elissa  Elan