After Wendy’s warned and Macy’s spelled doom for the retail sector, anything related to discretionary spending sold off hard. Truth be told, restaurant stocks aren’t really discretionary anymore, as Americans give up the avocation of home cooking in favor of microwavable sandwiches from SBUX.
In my view, any significant sell off in restaurant stocks is a buying opp. Amongst the best chains who do not poison their patrons with fecal matter are WING, SHAK, DNKN, SBUX, ZOES, DPZ and PNRA. I refuse to include MCD on moral grounds.
Over the past three months, the best performers in the space were ARCO, KKD, ZOES, RICK, QSR, PBPB, BOJA, PZZA and YUM.
Notice how all of the shit eateries are outperforming? I view this as a revolt away from health-conscious eateries, thanks to the CMG scare. However, my view is that this is more of a Wall Street rebellion, by money managing retards, than Main Street patrons. It’s not like people are heading out and asking for ‘moar GMOs’ in their sandwiches. Additionally, the nation is adopting healthier habits, not deleterious ones. Therefore, the spread between quality restaurants and beakless chickens is at recent highs–offering an opportunity for patient, long term, investors of American gluttony.
Here are today’s losers in the space, courtesy of Exodus.
Saturation is possible in this sector. So many shit food casual food fancy food places. They over built.
DNKN and SBUX do tons of business in the mornings. I think the growth potential is greater for DNKN, because I don’t think they’ve really unlocked afternoon/evening sales quite yet.
I think the buyer of Krispy Kreme will be looking for a bigger piece of the morning business, eventually.
That would be a major overhaul. Krispy Kreme’s menu is mega sugar donuts. Dunkin has some interesting stuff coming down the pipeline.
Fast food restaurants have been closing there doors all over The City, Marin and the Peninsula. Fuck that poison.
Cheesecake Factory downtown and Marin are always packed, night and day. Same with the Habit in Daily City, and of course the flagship stores in Santa Barbara.
You must be smoking crack if you actually long SBUX at this point. Its main business is selling a luxury beverage. So, do you think people are going to maintain their caffeine lifestyle with the uncertainty of the job market? A slowdown in growth will shred this stock by 30%. Every stock is a sell right now unless the price has reflected a recession scenario.
There is also the fat as fuck lifestyle that should get hit as well. Poor people used to be skinny.
trumpmeister – Recently, I’ve developed an interest in procuring various single-origin beans and roasting them myself. As a ham & egger, interpret that as a current trend, as I’m rarely on the forefront of anything. This can’t be good for the coffee houses…
I used to have a little home roaster. It had a rotating cylinder that you put the green beans in, and everything proceeded automatically. However, it stunk like hell, made a big mess, and the coffee didn’t taste that great. I thought it would be fun, but it wasn’t.
one-eighty – Ever try the popcorn popper method? https://youtu.be/DR6V_mHXHnE Outdoors on the porch whilst lunting might work..
The luxury sector is getting hit one by one:
1) The luxury purse namely KOR and COH
2) The luxury art namely BID
3) The mall retailers
Next, the luxury consumer products will be hit. Who the hell is going to pay for a $4-5 drink now? I’m not saying that people are going to stop drinking coffee. However, its growth will not increase or slow down, forcing a complete reset.
Rising minimum wage could limit fast food expansion.
The sector may be in a long term slump till wage costs stabilize