What is in this article?:
Darden Restaurants, Yum! Brands, Dunkin’ Brands, Buffalo Wild Wings and Chipotle Mexican Grill reveal growth plans at the Robert W. Baird & Co. 2013 Growth Stock Conference.
Several public restaurant brands joined some of the nation’s largest companies to discuss their plans for expanding sales and unit counts at the recent Robert W. Baird & Co. 2013 Growth Stock Conference in Chicago.
Strategies varied from brand to brand, including enhanced focus on menu, marketing, guest service or international expansion.
Here's a breakdown of what some major players in the industry — Darden Restaurants Inc., Yum! Brands Inc., Dunkin’ Brands Group Inc., Buffalo Wild Wings Inc. and Chipotle Mexican Grill Inc. — revealed during the conference.
Darden: Opportunity in specialty brands
While Darden’s three flagship brands — Red Lobster, Olive Garden and LongHorn Steakhouse — would speak to the value-conscious consumer more aggressively over the next several quarters, a growing portion of the company’s sales and unit expansion would come from its Specialty Restaurant Group, said chief executive Clarence Otis.
Restaurants in that division include The Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s and Yard House, which Darden acquired last July.
“We know there is a fairly significant percentage of consumers that we’re just not going to capture with any serious frequency with our three large casual-dining brands,” Otis said. “These, for the most part, are higher-end consumers and, to some degree, younger consumers. The Specialty Restaurant Group is designed to capture these consumers, and we have to do it with a multiplicity of brands, because by definition those consumer categories are small enough that you’re never going to have a 500- or 600-unit restaurant chain.”
He noted that Yard House in particular would be an important growth vehicle for Darden’s specialty portfolio, as it is a well-established concept, but with just 44 locations it still has a long runway for growth.
“Yard House actually helps both ends of that equation inside the Specialty Restaurant Group,” Otis said. “It’s mature enough that it can fund its own growth, but it does have significant unit growth ahead of it. So we felt like it was a good fit for that business, and that scale makes the Specialty Restaurant Group even more significant for Darden.”
With Yard House, the specialty portfolio produces more than $1 billion of annual sales and is growing at about 20 percent annually, Otis said. That puts the group on par with LongHorn, which rings up $1.2 billion in annual sales and grows at about 10 percent a year.