• 2021 restaurant system sales were record highs for both the $1B+ chains and, shockingly, for the independents and smaller chains according to government data.
• Stocks were particularly hard hit in January as concerns over inflation and rising interest rates were most worrisome for consumers & restaurants.
• While franchisee EBITDA multiples for the $1B+ Chains declined -1.7% according to RR’s preliminary 2H:21 valuation survey, they are expected to rise to 2019 levels during 1H22.
Commodity Trends
RR Dashboard: Oct 2021
• 3Q:21 Sales Strength Tempered by Labor Shortage.
• Restaurant stocks sharply underperformed in October as deteriorating labor issues and near record commodity costs are squeezing margins.
• 95% of restaurants have experienced significant supply delays or shortages of key food items in recent months, according to a survey by the National Restaurant Association.
Dashboard: May 2021
• 2Q quarter to date sales momentum on a 2-yr. stacked basis looks strong as the vast majority of restaurants are now open for dine-in and capacity constraints diminish across the country.
• Commodity Inflation Aggravated by Act of Terror.
• More sellers are coming to market, driven by improving sales & profit and by the prospect of a significant increase in the capital gains tax.
Dashboard: Apr 2021
Preliminary 1Q:21 average comp growth of +9.7% for the $1B+ Chains (+7.5% 2-year stacked) is a testament to the industry’s tremendous resilience in the face of impossible circumstances. While easing restrictions and strong economy should help keep the sales momentum going, ramping commodity inflation and labor challenges represent significant headwinds.
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