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Del Taco's 2Q19: Key Points

  • 2Q19 systemwide comps increased +2.2% & +1.7% company store comp reflected +4.2% check growth (including slight menu mix growth) partially offset by a -2.5% traffic decline.
  • Product & promotion strategy centered on the $4, $5 and $6 ‘Fresh Faves’ box meals (5% mix) for value and Beyond Taco & Beyond Avocado Taco platform for innovation (6%+ mix since 4/25 launch).
  • While the first 2 weeks of 3Q began with trends that were similar to 2Q, an unexpected traffic driven slowdown began in early July (partially reflecting a trade-off between check & traffic given its value pivot towards Faves & away from Buck & Under). Corporate expects that transaction driving initiatives (delivery, ongoing Fresh Faves box innovation & menu innovation including the launch of a new $2 breakfast toasted wrap and the planned return of its premium Carnitas LTO in September) will help to restore more favorable trends.

McDonald's 2Q19: Key Points

  • 2Q19 comps increased +5.7% (negative traffic, +2.5% pricing & the balance from mix), reflecting: successful national deals - 2 for $5 Mix and Match & Worldwide Favorites offers;) local deals - 70% of co-ops offered Filet-O-Fish deal during Easter; EOTF deployment; and strength in core menu items (Quarter Pounder).
  • Comps, which increased across all dayparts, were the highest since MCD’s 4Q15 launch of all-day breakfast.
  • Improved breakfast results benefitted from local promotions, McCafé initiatives & donut sticks. All-the-same, negative traffic during breakfast reflects competition from new entrants.

Starbucks fiscal 3Q19: Key Points

  • Fiscal 3Q19 comps increased +7% (+3% check/+3% traffic/+1% pricing), representing an +8% 2-year stacked comp (best results in 8 quarter) with flat traffic (comparable to results over the last couple of quarters, but better than negative traffic during fiscal 2018). 
  • Performance was attributed to: an enhanced customer experience; cold beverage innovation; & accelerated expansion of digital customer relationships (driving 2% of comp growth during the quarter). 
  • Simplified operations (elimination of 12 hours of work tasks at the store level) & an improved allocation of labor (via labor scheduling tool put in place during 2Q) is better meeting customer demand & benefitting customer connections.

Chipotle 2Q19: Key Points

  • 2Q19 comps increased +10% (+7% traffic/+2% price/+1.5% mix) helped by a +99% increase in high ticket digital sales (18.2% mix). Growth was also attributed to culturally relevant marketing focused on Chipotle’s great taste and real ingredients.

  • 20.9% restaurant level margin during the quarter was +120 bps higher than last year.

Olive Garden Fiscal 4Q19: Key Points

  • While the brand continues to withdraw promotional incentives based upon a strong consumer environment, it strengthened its everyday value platform throughout the quarter with a refreshed $5 value drink platform & with secondary TV advertising that increased awareness of its everyday value offers by highlighting lunch duos starting at $6.99, every day early dinner duo starting at $8.99 and Cucina Mia starting at $9.99.
  • Corporate believes that delivery remains an immature business & there is still lots to learn about whether this channel is incremental. As competitors shift more of the cost of delivery onto the guest, it remains to be seen whether this channel will work for today’s value minded consumer.