Changes in executive leadership, new business models, and brand acquisitions characterize a dynamic year for the industry’s largest owners of full-service restaurants.
The nation’s top 10 restaurant groups collectively managed more than $33 billion in 2012 revenues and more than 12,000 restaurants .
From DineEquity’s completed push to franchise 99 percent of the Applebee’s system to the retirement of venerable Ruby Tuesday executive Sandy Beall, America’s highest-performing restaurant groups made waves of strategic plays to bolster relevancy, heighten profitability, and attract guests.
A quick rundown of the key movers and shakers highlights how they are continuing to grab sales, share, and success.
Strategic positioning: Entering 2013, Red Lobster steadied itself from past struggles, LongHorn continued thriving under national marketing and Darden’s managerial touch, and sales at The Capital Grille surged 14.2 percent. Olive Garden, the only weak link in the otherwise sturdy Darden portfolio, rebranded with new menu items and re-imaged restaurants.
“Darden is one of the best operating companies in the business. They know how to evaluate business and the consumer,” says Dennis Lombardi, executive vice president of foodservice strategies for WD Partners.
In July of 2012, Darden expanded its portfolio with the $585 million purchase of Yard House, a 39-unit chain boasting average unit volumes (AUV) of $8.4 million. While the move fits neatly into the existing Darden roster—joining other promising growth concepts such as Eddie V’s, Seasons 52, and Bahama Breeze—Piper Jaffray restaurants analyst Nicole Miller Regan sees another important, yet often overlooked, motivation—the creation of career-advancement paths.
“Darden needs growth concepts to keep their own people,” Regan observes. “Nobody wants to be the incubator of human capital.”
|Company Name||2012 U.S. Sales ($000)||2011 U.S. Sales ($000)||% Change||2012 U.S. Units||2011 U.S. Units||% Change|
|American Blue Ribbon Holdings||1,479,000||1,510,100||-2.1||685||706||-3.0|
|Bloomin' Brands Inc.||3,949,000||3,849,000||2.6||1,275||1,254||1.7|
|Darden Restaurants Inc.||8,461,900||7,887,682||7.3||2,041||1,940||5.2|
|Golden Gate Capital||1,038,900||1,030,200||0.8||357||347||3.0|
|Ruby Tuesday Inc.||1,363,375||1,430,700||-4.7||770||792||-2.8|
|Sun Capital Partners Inc.||2,475,286||2,480,298||-0.2||1,890||1,964||-3.8|
|The Cheesecake Factory Inc.||1,743,800||1,684,537||3.5||177||170||4.1|