Industry News | May 23, 2007

Restaurant Demand 2007 Results Announced At NRA Show

Bookmark/Share this post with:
Email this story Email this story
Printer-friendly versionPrinter-friendly version
The restaurant industry is becoming recession proof due to increased pricing power over consumers, according to 2007 data from the Kanbay Research Institute (KRI). Although revenue growth is up in the restaurant industry same store sales growth is down, indicating that continued location expansion is not necessarily a winning strategy. The study, "Restaurant Demand 2007: Consumers Insights to Give Competitive Edge," found that the top 86% of the restaurant and beverage companies studied have experienced a decrease in Win Ratings signifying the need to identify and respond to core consumer desires.

Cracker Barrel Old Country Store (NASDAQ:CBRL), Ruth’s Chris Steak House (NASDAQ:RUTH), Corona and Starbucks have been spotlighted in the report to showcase their standings as part of consumers’ most desired Restaurant and Beverage Companies of 2007. Starbucks and Cracker Barrel are the only restaurants to make the top-desired list. They excel in providing an experience, not just a meal, and remain consistent to a business strategy that appropriately blends restaurant and retail.

The study also identifies the most competitive companies in the industry, which are those that have the strongest moat ratings and highest ROIC. Much opportunity exists for competitive advantage to be built in delivery chain to "lock-in" customers and "lock-out" competitors.

"Investor Warren Buffet coined the term ’moat’ to define how companies must create a barrier to entry in order to protect their profits," said Gary A. Williams, President of the KRI. "Our analysis of five years worth of consumer and financial data shows that to achieve an economic moat, companies build a consumer moat first."

Through five years of consumer interviews and financial analysis Gary A. Williams, President and Founder of KRI, and his research team have identified a core set of principles that create and build competitive advantage across six different industries. Williams announced the results of the 2007 Restaurant & Beverage study at NRA’s Restaurant, Hotel-Motel Show on May 19th, 2007.

The report, "Restaurant Demand 2007: Consumers Insights to Give Competitive Edge," is sponsored by Capgemini U.S. LLC, an affiliate of Adjoined Consulting LLC, of which KRI is an operating unit. To download a free copy of the report, go to https://www.kanbayresearch.com/nra2007.php.