All GLG News Analyses Filed Under: Restaurants

The causes of food cost inflation aren't about to go away.  Demand in emerging economies for a higher quality and more varied diet will increase, and ethanol production will make it more difficult for producers to respond quickly to the market. 

- The economy is working in favor of McDonalds. - Recent menu additions (coffee) are adding to average check.

- Commodity prices are rising and distribution costs are up. - Consumers are not willing to accept menu price increases.

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...

Cost of energy, commodities, labor, healthcare and capital continue to rise.  After watching the automobile industry discount itself into near ruin, companies should weigh carefully price wars that may stimulate traffic but push marginal units below profitability.

Commodity price increases will hit both large and small restaurants hard.  The key will be how they respond. The logical response is that they reduce portion sizes.  Portion sizes are already overwhelming and food waste is business cost.   Reducing portion sizes will be a health and...

The rise in food prices is likely to put enormous pressure on emerging market inflation and lead to increased political instability.

Food costs will continue to rise.  Demand for grains and protien will mirror demand for energy and other raw materials.  Restaurants feel the pain.  

McDonald’s free iced coffee could establish mobile coupons in four areas: 1) Launcing new products; 2) Cross-selling products; 3) Targeting buying habits, and 4) Building retailer loyalty.