Promising 2nd Quarter Leads to Optimism for 2018
By Kevin Stockslager, Vice President, Wray Executive Search
Restaurant same store sales again grew 1.4% during the second quarter of 2018 compared to last year. Promising news indeed for the industry, as both the casual (0.6%) and quick serve segments (2.0%) outpaced last year’s performance and showed promise for the remainder of 2018. The growth within the quick serve segment was the highest in over two years. Overall, this marked the third consecutive quarter of increased same store sales, great news for the industry after some negative quarters in late 2016 and early 2017. Of course, traffic numbers declined for the 13th straight quarter. However, the 1% decrease in traffic was an improvement from the 2.3% decline in quarter one.
The quarter was also marked by several big news stories within the industry, including the ongoing Papa John’s leadership situation involving founder John Schnatter, who recently sued the company in an effort to gain access to company records regarding his removal as the company’s spokesperson. Papa John’s also announced the hiring of a new marketing agency that specializes in sports and entertainment, Endeavour Global Marketing, in wake of the broken business relationships between the company and the National Football League and Major League Baseball, amongst other clients as well. The company just announced a 6.1% decline in same store sales for the second quarter as they continue to distance themselves from Schnatter and look to regain consumer confidence.
Again, several mergers and acquisitions within the industry, including the news that Focus Brands added to their list of concepts by purchasing the 800+ unit Jamba Juice for $200 million. Also of note, Z Capital Group took ownership of Real Mex as they again filed for bankruptcy, Del Frisco’s acquired Connecticut-based Barteca Restaurant Group for $325 million, Garbanzo Mediterranean Fresh execs made equity investments into La Boulangerie, High Bluff Capital Partners acquired Quiznos and Taco Del Mar in two separate deals, TriSpan purchased Rosa Mexicano, and FAT Brands finalized the deal for Hurricane Grill & Wings. Reports of several other brands perhaps being on the market also came to light, including Hakkasan Group, P.F. Chang’s, and Tilted Kilt.
Overall, a positive quarter for the industry as same store sales continued to grow and traffic numbers improved. While several brands have continued to struggle, certainly a renewed sense of optimism for the rest of 2018.
Kevin Stockslager | Vice President
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