60 Seconds. Market Evolution, Supply, supply, supply & Demand…:

July 13 2017

Is the market over-supplied or is demand softening?

Recent trading updates:

  • Burger, chicken & pizza are amongst the most reliable of casual dining fayre
  • Hence recent troubles at Ed’s Easy Diner, Comptoir Group, Tasty, Richoux & even bar group Revolution, aren’t too much of a surprise
  • But Restaurant Group provides burger, chicken & pizza & the administration of Handmade Burger caused a bit of consternation as the clue is in the name

The tide’s going out, who’s swimming naked?

  • Furthermore, the Sunday Times suggests Byron is considering closing four units at least partly because the burger fad is fading
  • But is demand slipping or has the torrent of supply driven up property & other costs and swamped the market?
  • See our earlier note on Slack Money, lemmings & reckless private equity
  • MOD Pizza (Sir Charles Dunstone) lost £5.0m in the year to end-Dec 16 & Five Guys UK (Charles again) lost £9.9m in the year to Dec-15. It has lost >£20m in the 3yrs to that date

Live Long & Prosper:

  • Product. Be relevant, maintain quality & offer value for money.
  • Service. Keep your staff engaged. It will show. Add theatre, work hard & be genuine.
  • Property. Don’t overpay, don’t compete with nutcases, tailor product & become a destination
  • Pricing. Don’t gouge. Don’t gouge. Don’t gouge. Grow sales, margin will follow.
  • Financing. Don’t overborrow. Preferably, don’t borrow at all.
  • Sounds easy? Feel free to give it a try someday.