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Margin pain on the horizon: Restaurants could get squeezed this year from a combination of...

  • Wednesday, February 13, 10:14 AM ET
    Margin pain on the horizon: Restaurants could get squeezed this year from a combination of higher commodity costs and frugal consumers, according to AlixPartners. Though traffic is forecast to rise 3%, the average ticket is expected to decline 4.7% with coupons, promotions, and discounts gaining favor. Chains that are expected to ride out the expected tough environment are those that can deliver healthy food fast. Chipotle (CMG -1.8%), privately-held Subway, and Panera (PNRA -1.5%) fit the bill.
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This news story has 6 comments:

  •  
    AlixPartners obviously has interest in CMG and PNRA, not MCD!
    13 Feb, 11:16 AM Reply Like
  •  
    And the potential minimum wage increase that the president talked about is further going to cut margins.
    13 Feb, 11:39 AM Reply Like
  •  
    This is why we hear the word "refranchise" so often. Chains like MCD and BKW have sold off most of their company operated restaurants so franchisees will bear the increased margin pressures. If franchisees have to raise prices there is an increase in the dollars paid to the corporate side.
    13 Feb, 12:26 PM Reply Like
  •  
    You need to understand the purpose of company operated restaurants, Richard. The hold steady at 20% for a reason.

    McD is not in business to make the franchisee money, rather, they are in it to make McD corp money.
    13 Feb, 01:38 PM Reply Like
  •  
    Just like if you rented out your house. Would you rent it for less. No.
    You would rent it so you made money.
    13 Feb, 01:40 PM Reply Like
  •  
    I agree
    14 Feb, 08:45 PM Reply Like
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