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Viewpoint - January 2019

Roaring into ’19 with Cautious Optimism: Takeaways from ICR by Bob Gershberg, CEO/Managing Partner Wray Executive Search Digital, delivery, value and labor costs remained the dominant themes at the 2019 ICR Conference. Tone amongst presenting companies was largely positive. Sentiment amongst the attendees, not so much. Fundamental concerns on weak sales, high costs and competition continue across all segments.  General economic anxieties around such issues as 2019 trade, tariffs, rising interest rates and President Donald Trump’s administration. Labor cost inflation and scarcity remain a substantial focus with technology as an offset to these issues. What a few of the Bigs had to say: Brian Niccol, CEO Chipotle – Drawing the crowds, Brian’s turnaround pitch is still strong. Early wins in key initiatives, particularly in digital and delivery resonated. Labor scheduling changes are being tested and laser focus on throughput are paramount to reaching the $2.5 million AUVs of yesteryear. “If you rewind on this business over the last three to four years, the company just went quiet and defensive,” Niccol said. “The brand just became invisible. And we are working to make it more visible.” Gene Lee, CEO Darden – Gene continues to eschew third-party delivery for many reasons including the concern of data ownership. “You have to make your dining experience compelling enough to get people to want to get out of the house and have it,” Lee said. “The onus is on us as restaurateurs to continue to find ways to make the dining experience interesting and make sure the value is there.” Cutback on promotions and discounts at Olive Garden yield stronger margins and healthy traffic growth. Charlie Morrison, CEO Wingstop – Wing costs are down, and the development schedule is up, adding 520 units in 2019, with a solid push into non-trad. How will the chain follow its success? Much of it will revolve around bolstering the company’s digital orders. Right now, more than 25% of the chain’s orders come through online and mobile ordering, a number Wingstop plans to increase considerably in the coming years. DoorDash delivery covers 30% of the system today, with promises to reach 80% by yearend. Randy Garutti, CEO Shake Shack, emphasized continued investment in the brand during early growth stages. Reiterated that comps are not the metric to focus on to judge performance. Opened 34 units domestically in 2018 and expect 36 to 40 in 2019. Big plans for International development. General Managers will start to receive SHAK equity this year.

Onward and upward…2019 is upon us!!!! All the best, Bob Gershberg |CEO|Managing Partner| (888) 875-9993 ext 102 Finding tomorrow’s leaders today!

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