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September 2019

RR 2Q19 SSS Report Highlights


  • Comp trends have been steadily improving over the last year with particular 2Q19 strength driven by QSR (and McDonald's in particular) as the chains have gotten the message that value and deals are right for the times. Value gets them in and it seems that it is not so hard to trade them up to more premium products once they come.


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August 2019 Insights

RR Unit Economics Report Highlights


  • Report highlights: (1) Average 2018 EBITDAR margin for the $1B+ chains came in even with 2017 at 18.8% (the lowest level since 2008) and it is notable that lower COGS were fully off-set by higher labor costs; (2) at the EBITDA level, lower G&A expense helped to off-set higher rent based on our lender survey; and (3) 2019 EBITDAR margin pressure reflects rising labor costs and slightly elevated commodity costs aggravated by increased industry discounting through 1H19, slightly off-set by modest same store sales growth prospects.

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July 2019 Insights

Net Unit Development is Slowing


  • System-wide sales for $1B+ chains continue to outperform comps as the chains continue to drive positive net development.

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June 2019 Insights

1Q19 Same-Store-Sales Wrap-Up


  • C-store sales continue their steady decline to -9.4% during 1Q19 while total QSR industry sales increased +9.5%, according to government data.
  • The $1B+ chains were not bothered either way as the QSR & FSR segments maintain their low-single-digit growth trends.

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May 2019 Insights


Key Points from RR's 2019 Menu Report 


  • We calculated the correlation between the changing value mix of total promotions to comp sale performance from 1Q17 to 1Q19.
  • Next, we calculated comp correlations with changes to the premium promotional mix and new product promotional mix.
  • Surprisingly, increases in the QSR value promotional mix was negatively correlated (-63%) to quarterly comps. This means that a QSR value focus has been detrimental to past sales, suggesting deal fatigue. Not surprisingly, increases in the FSR value promotional mix helped drive comp growth (positive correlation of almost +18%). 
  • Rather, QSR sales have benefited from premium promotions & new product news. This is the inverse for FSR where value is all that matters after years of steady price increases.

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