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Notable macro and industry-specific news items and price action from the restaurant space as well as our fundamental view on select names.


Corn stocks continue to nosedive. Analysts expect a 3% increase in consumption and although production is in its fifth year of record highs, supply won't match demand. Many see the steady increase in corn usage both as livestock feed, a biofuel, and the base of an ever growing group of other products as being the driving force behind the grain’s climb. In the next twelve months, it is estimated that Chinese consumption is 47% higher than a decade ago, adding to demand an amount greater than the entire crop of Brazil.


  • SBUX UK lost 34.2 million pounds sterling last year.  The chain suffered a 10 million pound hit related to the collapse of the Borders’ UK operations.
  • CMG has hired Mark Fabiani who will provide communications counsel related to an ongoing federal criminal investigation into whether the restaurant chain knowingly hired illegal immigrants. Chris Arnold, communications director for Chipotle, confirmed the hire in an email to PRWeek. Most recently, Fabiani was tapped by Goldman Sachs to help rebuild its image. He has also worked with Lance Armstrong to help defend the seven-time Tour de France winner against doping accusations.
  • JACK pulls toys from its kid's meals and redesigns the menu boards. They say they weren't bending to pressure to remove the toys, but that the toys weren't a driving factor for business. The chain’s new menu boards seek to draw attention to higher margin items and reduce clutter.
  • CBOU, PEET, KKD, TAST gained on accelerating volume on Friday. SONC and CMG declined on accelerating volume.


  • PFCB was cut to Equal Weight at Morgan Stanley. The price target embedded in the report is $51.
  • MRT and EAT gained on accelerating volume.  TXRH declined 1.5% on accelerating volume.
  • MS raises TXRH to Overweight. 


Howard Penney

Managing Director