GLG News by Restaurant Consultants

While the end of food inflation is not at hand, restaurants must manage the price/value/promotion relationship cafefully. New factors have emerged this week that will affect restaurants. Some restaurant companies will have earnings shortfalls later in 2009.

1.  DineEquity, now one of the largest casual/family dining chains is a bellweather for the segment.2. All the equity has been squeezed out of the balance sheet:     *Divested the real estate and corp. investment underlying franchise              ...

2009 Chain Restaurant Problems: Higher costs, tougher distribution environment & lower customer counts

Julia Stewart's ability to make critical deals with Applebee's franchisees may make or break Dine Equity

The DineEquity meltdown is symptomatic of the risks of doing business predicated on financial engineering. Stock price and The Street were slow to pick up on the risks on this business.

Burger King Franchisees face internal cost pressures and profit erosion at a critical time.On top of commodity increases and declining sales patterns, BKC mandate could drive several franchises into BK.BKC show indifference to profit and survival of their franchisees.

Most restaurant companies do not have the right information to make smart pricing decisions.  They need to understand the price sensitivity of every item on the menu. This involves using behavioral research more than the attitudinal research that most restaurant companies favor.

- Food cost inflation will continue - Customer counts are declining - "Right sized" has different heath connotations

With the economic conditions the way they are, restaurant companies are scrambling to come up with ways to combat the conditions that are affecting their operations. Commodity costs aren't coming down, so how can they offset higher prices? What strategies should companies be using to survive through...

There are better ways to raise capital to fund operations and growth than divesting precious real estate assets.  The cash flow implications of sale-leaseback transactions are daunting over the long haul, and will ultimately have a negative impact on many operators.  Restaurateurs should resist...