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.