by Kevin Stockslager, Vice President at Wray Executive Search
The restaurant industry continued to show strong signs of growth heading into 2019. For the 8th consecutive month, overall restaurant same store sales increased, up 2% for the month of January. The 2% growth in same store sales in December 2018 and January 2019 marked the highest increases within the industry since 2015. Of note, same store sales increased across all segments within the industry for the month of January. Similar to previous months, the growth in same store sales was related to increased guest check, as traffic continued to decline, down 0.7% for the month. Consumer spending continues to grow, which bodes well for the restaurant industry in 2019.
Last year, the focus on staffing challenges was a big concern within the industry. Darden CEO Gene Lee recently cited “the war for talent” as the biggest challenge facing the restaurant industry today, a sentiment that still holds true. Restaurants have continued to identify staffing issues, including turnover, keeping restaurants fully staffed, and poor retention rates, as one of the primary worries. High turnover and retention have resulted in situations where staff may not have completed training and lack engagement in their role, leading to operators having difficulty providing the level of customer service needed to drive customer satisfaction and increase repeat traffic. In the coming year, restaurant companies will look to increase compensation, provide increased training opportunities, and drive employee engagement to reduce turnover in this tight labor market.
The start to 2019 has not been as busy as 2018 in terms of mergers and acquisitions. Of note, Taco Bueno was acquired by Sun Holdings, J.H. Whitney Capital purchased Firebirds, the sale of Bojangles to Durational Capital Management and The Jordan Company was finalized, and Papa John’s announced a $200 million strategic investment from Starboard. Look for M&A activity to pick back up in the coming months, with several of the large restaurant conglomerates look to add to their growing portfolio of brands.
Finally, some big news in terms of executive movement within the industry. Shake Shack announced the hiring of their company’s first CMO, Bloomin’ named a new President for Bonefish, Bojangles’ revamped their leadership team, Papa John’s appointed their first Chief People Officer, and Restaurant Brands International announced several internal promotions within their leadership.
Kevin Stockslager, Vice President
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