Mr. Tarantino: We're doing quite a bit of work to understand the traffic and cost trends in the industry. Most importantly, we are focused on the traffic trends because that is the key variable that tends to drive valuations for the individual stocks. So getting a firm read on where traffic trends are heading will allow us to make better recommendations on the individual stocks.
TWST: Is it more difficult than usual to figure those out? What are you seeing in a general sense?
Mr. Tarantino: I would say it is a little more difficult than usual due to all the pressures on consumer spending. Year-to-date in 2009, we're seeing tremendous pressure on traffic across the board, with slower consumer spending reflecting a variety of macroeconomic factors, such as weak consumer confidence, tightening of credit conditions and still very challenged housing markets. We think that all those factors have played into consumers spending less on eating out, and that has influenced the traffic trends we're seeing on the publicly traded restaurant scene.
Tickers included in this excerpt: BWLD, CMG, CPKI, DRI, GMCR, PEET, PNRA, SBUX, TXRH
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