Restaurant Themes - Casual Dining
Today we will be holding our Restaurant industry themes call, focusing on the Casual Dining industry.
CALL DETAILS:
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DOORDASH Grocery
DASH is a SHORT
DoorDash and Instacart are duking it out in Canada as DASH partners with Loblaws in Toronto, Calgary, and Vancouver, and Instacart partners with Walmart in Toronto to handle 30-minute delivery of a smaller selection of grocery and convenience items. Loblaws is fulfilling these orders via DashMarts, which are owned and operated by DoorDash on behalf of the retailer. Both companies are powering white-label and marketplace experiences for such orders. Loblaws will keep its marketplace listing on Instacart for its customers' weekly stock-up needs. On DASH, Eric Newcomer posted an interesting post about Sequoia's position in DoorDash. The firm led Series A in 2014 and has only sold ~21% of its position over the last eight years. Had it exited after its lockup, Sequoia would have returned ~$6.4bn (15x) on its $415mm investment. Today, that stake is worth ~$2.7bn (5.5x).
Dynamic Pricing in Restaurants
Dorsia is a new members-only reservations marketplace that combines dynamic pricing with guaranteed minimum spending to book prime slots at some of the most exclusive restaurants in NYC, The Hamptons, and Miami. Matt Newberg of HNGRY studied the history of dynamic pricing in hotels and airlines and why restaurants might be next. Here's how it works – "prospective members will apply via Dorsia's website to access an exclusive reservations marketplace where they can view available table slots with different guaranteed minimums listed for each. Customers prepay the minimum as an up-front credit, paying the difference above that amount at the end of their meal. This effectively only enforces "pay-to-play" reservation fees for smaller checks, incentivizing bigger spending for prime reservation slots. Restaurants set the minimum for each window based on their perceived value. The service is currently in a closed beta for the summer but plans to introduce a membership fee on top soon after that. As many would guess, the name is a nod to the fictional restaurant namesake in the 2000 cult classic film American Psycho where Patrick Bateman is consistently unable to get a table despite his Wall Street Rolodex."
Taking on leverage into a SLOWDOWN
Dave & Buster's Entertainment closed on the $686 million acquisition of Main Event from Ardent Leisure Group Limited.
PLAY is a SHORT
Main Event Entertainment is a family entertainment brand that offers bowling, laser tag, hundreds of arcade games, and virtual reality. It is a premier sponsor of Special Olympics International, supporting via fundraising and serving as a venue for Special Olympics events nationwide. Founded in 1998, Dallas-based Main Event operates 50 centers in 17 states across the country. CEO update: "These two brands perfectly complement each other, and their joining puts our Company in a strategically unparalleled position for accelerated, profitable growth under the leadership of Chris Morris. Chris' track record of effective execution and mindful leadership will be invaluable in unlocking additional value for our shareholders."
Dave & Buster's set a conference call for July 12 to report combined historical results. We look forward to the additional disclosure because the disclosure is lacking. How will the new CEO present to the markets, and how will he put his stamp on the business? Will he continue the $5 late-night drinks?
More to come!
