• RR’s Intent to Eat Out Index (our survey of 1,500 consumers’ plans to eat-out over the next month) increased +6% y/y after peaking last month.
• We see a higher percentage of “about the same” responses as consumers return to more normal routines (particularly among the 18 – 24 year-olds).
Unit & Sales Growth Report provides a 10-year history for 56 $1B+ chains including: (1) total units; (2) company vs. franchisee ownership; (3) new units; (4) closures; (5) franchise transfers; (6) average units per franchisee by concept; (7) systemwide sales; and (8) system sales market share.
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Applebee’s (the 2nd largest player by sales in the casual segment) benefits from its “Eatin’ Good in the Neighborhood” grill & bar positioning (approachable, accessible & affordable) which provides a place to connect with family & friends. Culinary innovation (leveraging mainstream American recipes/flavors) and buzzworthy Neighborhood drink of the month deals keep the restaurants interesting and LTOs almost always feature attractive price points and popular promotions including its All-You-Can-Eat Riblets.
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Papa John’s positioning is around a relentless pursuit of “better” and bringing people together with quality differentiators that include: fresh original dough, fresh packed sauce, meats without fillers and pizzas with no artificial flavors or colors. The brand’s more recent marketing effectiveness is attributed to new creative that focuses on pizza quality together with a reallocation of ad spend away from high-cost national sponsorships into working media where it is able to reach a broader range of consumers more often.
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Choppy Rebound to an Improving Trend: Same Store Sales Trends Continue to Improve; New Products Replace Free Delivery Offers; Employment Moving in the Right Direction; Commodity Prices Trend Lower, but Remain Volatile; Outlook Shifts Slightly Bearish, Strongly Favors QSR; Restaurant Stocks are Down -11% vs. Market during 1H20; Gap Between Cap Rates & 10-Year is at a 7 1/2 Year High.
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RR’s Menu & Promotions analysis provides data for 56 chains (33 QSR and 23 FSR) including: (1) a 6-year history of total menu items (2015 – May 2020); (2) promotional mix by quarter; (3) new product intros; (4) average check; (5) daypart sales mix; (6) digital & off-premise sales mix; (7) menu category mix; and (8) monthly new product calendar.
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Shrinking menu trends: 1) acceleration of menu declines; 2) larger menus could benefit the most from reductions; 3) operational complexity also driven by LTOs; 4) operational complexity = core menu creep + LTO pace. Using stocks to gauge recovery. Domino’s executive summary.
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• RR’s Intent to Eat Out Index (our survey of 1,500 consumers’ plans to eat-out over the next month) increased +16% y/y to its highest level since we created the index in September 2018.
• Notably, the Index has set records for the last 2 months after bottoming in March 2020. Results were helped by the intention of those 45+ to eat out a “little more” as older consumers begin to feel more comfortable.
Economic Distortions Continue to Flow-Thru Sales Trends; Free Delivery Substitutes for Declining Value Offers; Stimulus Checks Bolster Income, but Consumers Save More; Margins Continue to Benefit from Lower Commodity Costs; Valuation Outlook Turns Slightly Bullish, Favors QSR; Stocks Extend April’s Rebound
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