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5 Takeaways From The ICR Conference

Jayson Derrick

Multiple restaurant executives presented at the ICR conference in Orlando this week. The restaurant industry is ultra-competitive, as consumers have more choice than ever thanks to third-party delivery options. The following are some key themes that investors will continue monitoring throughout 2020 and beyond.

1. Delivery

Many restaurants may have come to accept the fact they need delivery to remain relevant, but it doesn't mean they have to like it, according to Nation's Restaurant News.

Some naysayers are standing firm, including Darden Restaurants, Inc. (NYSE: DRI) CEO Gene Lee, who said he is "willing to give up that person will never get off their butt."

2. Bigger Isn't Necessarily Better

Domino's Pizza, Inc. (NYSE: DPZ) is taking a bigger isn't better approach in its delivery logistics, according to QSR Magazine. The chain continues to shrink its delivery areas and believes it is better off doing so.

"The bottom line is, our drivers are busier than your drivers," Domino's CFO Jeff Lawrence was quoted as saying during a Tuesday presentation.

3. Don't Forget About Pickup

Despite the surge of restaurants jumping into the delivery business, 93% of all orders that aren't consumed in restaurants consist of traditional takeout, NRN reported

Pickup or takeout orders carry much higher margins and aren't dependent on third-party companies and outsiders.

"One thing I want to say at the top, we think a lot about delivery, but we also think a lot about takeout," Noah Glass, CEO of online ordering platform Olo, said during the conference. "Takeout is still a massive part of the overall off-premise space."

4. A Good Time To Admit Mistakes

United Natural Foods Inc (NASDAQ: UNFI) CEO Steve Spinner said during his Tuesday presentation the company was guilty of being "overly optimistic" in the benefits of acquiring Supervalu, according to Supermarket News. He said the company is "still paying the price in the stock price today" but will focus on the positives.

"What we got right is that we were in front of the changes that were taking place in consumers and retailers, in that they would want to aggregate natural, specialty, fresh, protein, conventional — everything."

5. Good Brands Can Expand During A Recession

Darden is preparing its brand to outperform in a recession, although there is no reason to believe one is forthcoming, QSR Magazine separately reported. If a recession does hit the U.S., then store closures will likely be "greater this time" compared to the last recession.

However, the company believes that "good ideas and well-positioned brands" will be able to grow at a time when the economy contracts.

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