Three areas of optimism for foodservice


At least two restaurant analysts see a glimmer of hope in the economic outlook for the foodservice industry.

With a consumer sentiment survey showing optimism and retail gasoline prices down from highs earlier, investment firm Morgan Keegan & Co. Inc. of Nashville, Tenn., issued a note this week that was subtitled “Resilient operating fundamentals provide a reason for hope.”

“We believe recent macro economic data appears to point toward gradual improvement including consumer sentiment hitting a five-month high last week,” said restaurant analysts Destin Tompkins and Bob Derrington, who added that it raised “hopes that an improving holiday season could provide a lift for the economy.”

“In addition, many chains could see a modest [same-store sales] benefit in December through February, as last year’s harsh winter weather will usher in somewhat easier [same-store sales] comparisons to end 2011 and begin the New Year,” the analysts wrote.

Tompkins and Derrington said the restaurant industry had made it through the third quarter “reasonably well.” Of 33 restaurant companies reporting quarterly earnings in restaurant weeks, 23 beat expectations, three met them and seven missed, the note said.

“While we are optimistic operating fundamentals for the industry will gradually improve through Q4 and into 2012,” the analysts said, “we acknowledge a number of challenges facing the industry, including a still fragile consumer spending environment —distinctly bifurcating the ‘haves’ and ‘have nots’ — and a continued difficult commodity environment contrasting the need for additional menu pricing at a time when a strong value message is demanded.”