Nicole Miller Regan, Managing Director and Senior Research Analyst at Piper Jaffray, Interviews with The Wall Street Transcript: Brand Equity Surfaces as the Main Restaurant Differentiator

Wall Street Transcript

67 WALL STREET, New York - March 12, 2013 - The Wall Street Transcript has just published its Restaurants, Food and Drinks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Shift Toward Healthier Food Options - Emerging Market Expansion - Focus on Brand Equity - Store Sales Growth Trends - Cautious Consumer Spending

Companies include: Starbucks Corp. (SBUX), McDonald's Corp. (MCD), Chipotle Mexican Grill, Inc. (CMG), Panera Bread Co. (PNRA) and many more.

In the following excerpt from the Restaurants, Food and Drinks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How would you characterize, in general, the current state of the restaurant industry?

Ms. Regan: Things seem a little shaky. A couple of things are playing out. There's economic uncertainty that's probably not too dissimilar to the past couple of years. Comparisons in the first quarter here at the beginning of the year are more difficult, given the really good, nice weather last year that we've forgotten about. Also, tax refunds have been delayed by a couple weeks, so there are a number of issues that are really causing trends to stall out here in the first quarter.

TWST: What macroeconomic factors do you most focus on in terms of the operating environment for restaurant companies?

Ms. Regan: Honestly, we do think the best thing is just for operators to look at their own value proposition, the demographics and really who they're going after. But that being said, of course macro impacts everybody to some degree. The highest correlation has historically been between restaurant sales and GDP, followed by consumer confidence, followed by unemployment and then gas prices are in there somewhere.

I do think that of those four factors, each of them plays a different role at different times depending on which one's moving around. Gas prices have gone up again recently, and there's talk about how more than just the median-income family, but even up to the $70,000 to $80,000 income households are spending more on gas and food away from home, and that wasn't the case a decade ago. So albeit we can't always prove it out with our research, looking at comps and a correlation to gas prices certainly has an impact...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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