Weekly Food Industry Report: June 7, 2013
Every week, we take a look into the biggest financial news to emerge from the world of food. Here is this week’s:
Landry’s: Landry’s Inc. has purchased Mastro’s Restaurants of Woodland Hills, California. They plan to expand to a total of 14 units in the next 15 months. Terms of the deal were not released, but Mastro’s CEO Mark Levy will stay in the Landry’s division. Landry’s said that its companies were expected to earn $2.5 billion in annual revenues.
The Restaurant Industry: Black Box Intelligence and People Report released The Restaurant Industry’s report of positive sales, making May the third month of increased sales. Same-store sales rose 0.8% in May, over April’s 0.4% increase. Same-store traffic results went down 1.6%, but that’s still a slight improvement over April. Bill Schaffler, president of Black Box, said sales were still weaker than expected, but three straight months of positive sales has not happened since June – August 2012.
Good Times Restaurants, Inc: Good Times Restaurants announced that same-store sales increased by 16% in May, in comparison to only a 5% increase in May 2012. The April report of same-sales noted an increase of 11.4%. President and CEO Boyd Hoback said they had expected sales increases from their breakfast options and chicken tenders, but they were still content with their progress, almost doubling their chicken category sales since last year.
Pryority Food Marketing: Pryority Food Marketing, a food brokerage company, was bought by Advantage Sales & Marketing, but terms were not released. Pryority’s CEO Al Albano and President Mike Sonberg will remain on board and lead this business unit.
H.J. Heinz: H.J. Heinz Company announced that they received approval for Berkshire Hathaway and 3G Capital to acquire them. The merger agreement was first released on February 14 but was approved by Heinz shareholders on April 30. The expected close of this transition will be June 7, 2013.
Dave & Buster’s, Inc: Dave & Buster’s announced that they would release their financial results for the first quarter of 2013 on June 17, 2013.
Cracker Barrel: Cracker Barrel released their financial results for their third fiscal quarter of 2013. Since last year, store traffic increased 0.7%, store restaurant sales increased 3.1% and store retail sales increased 5.5%. Operating income margin increase 0.5% to 6.9% since the prior quarter. Total revenue increased 5.2%, but the company believes bad weather was the reason their numbers were not as high as expected.
Restaurant Chains: According to a study performed by SpenDifference, 64% of restaurant chains only raised their menu prices by 0.5% or less, but over 90% expected to increase their prices this year by an average of 1.6%. Less than 10% do not plan on increasing prices. Chain executives anticipate same-store sales growth by 2.2% in 2013, 25% higher than 2012, as well as predicting 75% of that growth being from price increases and steady consumer traffic.