QSR

Domino’s is working hard to hold down menu & delivery price increases while seeking to drive incremental loyalty & profitable DSP transactions.

2Q23 in-Shack traffic increased +4.7% y/y with a +10.7% y/y increase in same-Shack sales in its in-Shack channel as more guests, who are migrating to their in-person habits, are using Shake Shack’s new kiosks which are driving mix & check.

Carrol’s traffic trends are improving (helped by service improvements, increased hours of operation, equipment/facility upgrades & incremental ad spend) and pricing is expected to decline to mid-single digits during 2H23, further helping traffic.

Jack in the Box’s results reflected a continued staffing & operating hours improvement, particularly during late-night which benefitted from Jack’s Snoop Dogg promotion.

Net disposable income is starting to improve & Wendy’s is keeping customers that traded down from mid-scale casual last year. Also, management reported higher income cohorts are starting to shift into QSR & that the lower income cohort will benefit as inflation continues to moderate.

BK’s going forward sales should benefit from a ramp-up in its plans to invest $400MM for a brand upgrade, including $150MM “Fuel to Flame” spend on advertising & digital investments and another $250MM “Royal Reset” spend on high-quality remodels & relocations, restaurant tech, kitchen equipment, and building enhancements.

Starbucks’ digital prowess helped facilitate an all-time high food attachment during its fiscal 3Q23, driving a higher ticket & record average weekly sales.

Pizza menu pricing strategies are different than those for QSR drive-thrus because of pizza’s e-commerce order model in which customers plan ahead & easily shop around online for the best deal. This difference explains why there is an average 20% discount applied to pizza industry sales.

Wingstop reports a clear line of sight to a $2MM AUV based upon a strategy to: build brand awareness; drive menu innovation; expand delivery; and progress in digital transformation & data-driven marketing. Also, the brand has an opportunity to increase its penetration among heavy QSR users who have either not heard of, or have not tried ,Wingstop.

The fast-casual chain, Sweetgreen, which serves food with seasonal & organic ingredients, continues to gain financial & operational ground even as its comps slowed during the quarter.