Dashboard: March 2020

Apr 2, 2020 | Dashboard

Same Store Sales Trends

Gauging A Sales Rebound

  • While near-term sales forecasts are mostly meaningless, we can begin to consider comp results for the full-year 2020.
  • We know that the first 3 periods of the year were relatively strong with what seems like the possibility of 2 periods of stay-at-home (through 4/30) with QSR (ex-pizza) losing dine-in (~25% of sales) and FSR losing something like -80% of their mix (85% dine-in decline offset by a +5% pick-up in off-premise).
  • The question is how fast will be the recovery for the final 7 periods of the year. If you assume flat sales by period 12, our model suggests that full-year 2020 results could be down by ~-10% for QSR and ~-30% for FSR. This could set-up a very big pop for 2021 which is where we should be focused.
  • In any case, everyone is welcome to use their own assumptions and we will certainly know more in a month or so.
  • According to Quantifind’s social media analysis below, consumer interest in the virus is steadily declining which we interpret as a positive for going forward sales.


Promotional Composition

Half the Chains Are Offering Free Delivery

  • While the total value promotional mix jumped for both QSR and more so for FSR, the increase was not as sharp as we expected.
  • Not surprisingly, the big jump in our “Other Value” category was driven by free delivery offered by 52% of the 56 $1B+ Chains (65% FSR/42% QSR).


Economic Outlook

Government Help is On the Way

  • While the number of Americans filing for unemployment benefits spiked to a record-breaking 6.648 million for the week ending 3/28, some relief is expected for consumers as individuals can receive up to $1,200 and couples will receive up to $2,400 — plus $500 per child as part of the $2 trillion in government relief which will start in late April. In addition, unemployed workers will also receive an extra $600 a week on top of their state benefits, for up to four months.
  • According to one economist we know, it is plausible that the unemployment rate could hit 10% depending on the size of the 2Q GDP contraction.
  • In any case, the economy should also benefit from the SBA backed Paycheck Protection Program available to businesses (with loan amounts up to 250% of average monthly payroll) and companies that keep employees on the payroll for eight weeks will receive loan forgiveness for the portion of the loan used for payroll, rent, mortgage interest or utilities.
  • Interest rates fell to the lowest levels in at least 30 years with the 10-year Treasury rate falling to 0.58% as of 4/2.

Key Cost Trends & Forecasts

Lower Demand = Easing Commodity Costs

  • Commodity costs are beginning to see some signs of easing and the BLS Foodstuffs index fell 10% in March (lowest level since Sep. 2009).

Franchisee EBITDA Valuations

M&A Activity on Hold

  • Sharp decline in RR’s Valuation Index reflects current market uncertainties including: when dine-in restrictions will be lifted; how long it will take the consumer to recover; increased complexities associated with how to account for the current period of restricted operations (and impact of grants, abatement, re-opening costs); and what the lending environment will look like.
  • Government assistance programs should provide some relief to both consumers and businesses in the coming weeks.
  • M&A activity is currently on hold as both buyers and sellers assess the situation.

Stock Performance

Stocks Resume Free Fall Amid Shut-Down

Marcus & Millichap Cap Rates

Cap Rates Stable for Now


Marketing NFS Graphic Updated
NoBull Posts Thumbnail
Restaurant Research

Email Sign-up

15 Second Posts

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

Part 2: Incremental Interest Payments Squeeze Disposable Income

In this post, we quantify the pressure on disposable income driven by credit card & auto loan payment increases since the onset of the Fed rate hikes in early 2022 in addition to the impact of the coming resumption of student loan payments in October 2023.

Part 1: Keeping an Eye on the Consumer’s Top-Line

The consumer’s top-line benefits from a high employment rate, generous raises, and a healthy savings rate which indicates an income surplus.

Teenage Wasteland No More

The American youth (15 – 24-year-old) unemployment rate makes our country look downright productive compared to the rest of the world!

The Fight for Global Manufacturing Gets Personal

Post-covid U.S. exports of goods & services have skyrocketed as American companies have worked hard to onshore their supply chains, providing them with products to sell overseas. Correspondingly, U.S. imports from China have fallen considerably since late 2022 after China’s extended covid lockdowns left their American customers without product to sell.  

China’s Deflation Looks Pretty Good Compared to U.S. Inflation

While the U.S. has been suffering from severe post-covid inflation, China’s prices have been spiraling lower. What’s up with that?

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company