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Notable macro data points, news items, and price action pertaining to the restaurant space.

MACRO


The ICSC sales index posted its 4th straight decline, falling 1% last week. Year-over-year growth slowed to 3%, the slowest pace in eight weeks.  It appears that the stock market volatility is impacting consumer behavior.

It’s unlikely that the consumers will lead us out of the recent economic malaise and continued unfavorable moves in equity, gasoline or house prices are significant threats to future spending.

Corn rose to a 10-week high in and soybeans gained as worsening crop conditions in the U.S. may be smaller than estimated.  Corn traded at $7.412, the highest for the most-active contract since June 9.

SUB-SECTOR PERFORMANCE

On the better than expected Knapp track data the Full Service sector turned in a strong performance yesterday (it should be noted that the move was not confirmed by volume studies).    The Food processors held in despite the performance of SAFM down 3.5% (as the daily volume study spiked 167%) and the upside move in corn. 

THE HBM: CHUX, DNKN, PFCB, GMCR - hfbrd

QUICK SERVICE

GMCR under fire for its aggressive accounting announced the appointment of Stephen L. Gibbs as its Vice President and Chief Accounting Officer effective immediately.

Yesterday, I highlighted DNKN’s egregious valuation…  don’t see much upside from here.

FULL SERVICE

CHUX announced that Wilson L. Craft, O’Charley’s Concept President, has resigned to pursue other opportunities.  Maybe because the opportunities at O’Charley’s are limited!!!

Put this in the aggressive promotion category and let’s hope this is limited to just Hawaii - For a limited time, P.F. Chang's Hawaii is offering a Buy One, Get One Free coupon! Download one and bring it in….

THE HBM: CHUX, DNKN, PFCB, GMCR - pgcbbogo

Pei Wei Asian Diner is offering new menu pricing under the combo banner of “Diner Select,” as parent company P.F. Chang’s China Bistro Inc. works to stem sliding sales.  The new “Diner Select” option lets customers choose from five popular Pei Wei meals, starting at $6.25 for a reduced-portion entrée and a choice of a spring roll, soup or Asian slaw as sides. Pricier proteins, such as beef or shrimp, cost more, as do substitutions such as fried rice for white or brown rice - NRN

THE HBM: CHUX, DNKN, PFCB, GMCR - qsr

THE HBM: CHUX, DNKN, PFCB, GMCR - fsr

Howard Penney

Managing Director

            

Rory Green

Analyst