What is in this article?:
- Sizing up restaurant market-share competition in 2014
- Casual dining: Supply outweighs demand
- Limited service: Opportunity beyond McDonald's
- Snack and specialty: Brewing the best opportunities
Securities analyst Andy Barish of Jefferies Equity Research predicts which chains might gain and lose share this year.
Limited service: Opportunity beyond McDonald's
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Though limited-service chains have been prolific in menu development and aggressive in promoting value the past few years, especially in the hamburger segment, they operate in a very mature, chain-dominated part of the industry, making it difficult to break through and take share, Barish wrote.
But opportunities might have opened up for some burger chains in light of segment leader McDonald’s decision to focus on the back-of-the-house in 2014 at the cost of a slight deceleration of its remodeling program.
“McDonald’s has taken a breather after a long period of share gains in order to focus on execution and throughput, and we could see some of the chains with strong menu innovation and everyday affordability — like Sonic, Jack in the Box, Burger King and Wendy’s — step in and grow their share,” he wrote.
Barish added that Panera is in a similar situation in the less mature bakery-sandwich segment, having lost some market share to regional competitors after an increasingly complex menu caused some throughput issues. Still, he noted that Panera also could reaccelerate market share gains in 2014 with the launch of a national cable ad campaign.
“If we view the still-growing hamburger category as a model for chain saturation, there could be an opportunity for more nimble brands to step in and attract consumers as Panera focuses on throughput,” he wrote.
In Mexican, Taco Bell and Chipotle Mexican Grill dominate their respective quick-service and fast-casual sectors in terms of unit count, “but we still see opportunity for additional share gains,” Barish added. He cited Taco Bell’s impending launch of breakfast, as well as both brands’ plans to grow beyond their typical markets.
“Qdoba also has an opportunity to take some share from local operators and even Chipotle, especially in its core markets and as its recent changes to management, operations and execution gain traction,” he wrote.