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We expect QSR to continue to reap the benefits of strong employment trends among young people.  Older cohorts also showed strength in January employment data.

While the 10-24 and 24-34 years of age cohorts saw sequential deceleration in year-over-year employment growth, the employment report was generally positive for restaurant companies.  Specifically, the 35-44 and 45-54 years of age cohorts saw employment levels rise year-over-year for the first time since before the recession.  55-64 year olds’ employment level gained 5.1% year-over-year.  The sequential deceleration in the younger cohorts is not a huge concern to us at this point, and we expect QSR to continue to gain from the positive employment news.  Casual dining is also likely to benefit from the improvement in older cohorts, in particular, as well as from overall employment gains.  Casual dining is trading well today: DIN, EAT, BWLD, DRI and others all up. 

EMPLOYMENT DATA UPDATE - Employment by Age

Hiring trends in the restaurant industry remain strong as of December.  See the chart below to view the longer term trend.

EMPLOYMENT DATA UPDATE - restaurant employment

Howard Penney

Managing Director

Rory Green

Analyst