While Carl’s Jr. is building upon its positioning as a purveyor of tasty burgers, the chain remains challenged to meet the growing demand for value in a tough economic environment given elevated operating costs associated with its West Coast orientation.
new build costs
While Wingstop enjoys strong positioning and adept execution around an extremely popular menu item (propelling the chain into the big league), its progress is dependent on mitigating volatile wing costs which is key given the brand’s orientation towards a lower-income demo in a challenging macro environment.
While Hardee’s has improved its relevancy around its brand positioning, the need to strengthen its value positioning may still be required to drive its top and bottom lines.
While Arby’s is well positioned as a QSR drive-thru player that can serve as a credible alternative to a NY deli, the challenge is to expand its market reach among more affluent consumers sufficient to drive both frequency and checks.
While Denny’s management team is executing well around a very solid strategy, the brand is held captive to currently unfavorable economic conditions which are particularly hard on its core low-income demo and which also challenge Denny’s ability to execute around its key price value objective.
Del Taco is the 2nd largest Mexican QSR, positioned around a wide variety of better-quality food (use of fresh ingredients represents a competitive distinction) offered for reasonable prices. While Del Taco enjoys strong concept fundamentals, the chain is tested by a harsh California business environment aggravated by the brand’s orientation towards a vulnerable, less affluent demo.
Taco Bell is extremely well positioned as the only $1B+ national QSR Mexican player and enjoys the added bonus of being able to tap into a material COGs outperformance to go deeper into value should that be warranted.
While Popeyes enjoys a very strong brand positioning, even as sales moderate from its famous chicken sandwich spike, the current economic challenges for its core lower-income demo combined with huge chicken cost inflation represents a notable sales challenge for an unknown duration.
While Applebee’s solid turnaround is exemplified by its recent sales outperformance, it remains to be seen how well the brand’s core Middle American demo will fare given the current economic stress that is sure to prompt at least some QSR trade-down.
While Little Caesars maybe the best at carryout, it remains challenged with the need to translate its fun menu and marketing into sustained traffic around its higher price points sufficient to increase unit level profits.