Technomic, the restaurant consultancy group, released its annual reporting of the top restaurant chains in the US. Technomic's data shows a current slow down in restaurant sales in 2007 relative to 2006.
The quick causal and limited service concepts continue to do well. But was interesting to see is that even among the good segments, there are still losers. This will ultimately be the demise of poorly run concepts.
More importantly, what I think this will do is make the restaurant industry stronger. The industry is due for some contraction and with any cycle it is necessary to weed out the players from the dogs. Look at Brinker for example. They recently let go a bunch of talent. But in my mind it was probably necessary. What has Brinker done lately. The brand was once known as great breeding ground for tomorrow's talent. If you had a Brinker background and were half decent, you would go far in this industry.
But look at Brinker now. Just about everything they have had a hand in is terrible. Romano's is in the toilet. Chili's has seen better days. And Maggiano's is fluttering about. Perhaps it is the casual segment since it has really taken it on the chin over the past couple of years. But what I think that the casual dining segment needs to learn is that most American's today want quality and value. That is probably why the quick casual (Panera and Chick-fil-A) and limited service (Starbucks) are still doing well.
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