The casual dining space within the restaurant sector recently has seen improving numbers coming from consumer confidence picking up in the working middle-class customer, as well as a refocusing on the dining experience, rather than menu prices, says Will Slabaugh, Research Analyst at Stephens Inc.
“What you’ve seen is the traditional casual diners that have been winning throughout previous decades have slowed after the recession, and it’s become much more of a value push to try to hold your traffic by pushing price points,” he said. “So the bigger casual diners that weren’t pushing price points were hurting, and the guys who were out there taking share were offering something different than just a price point, offering an experience.”
Slabaugh favors Buffalo Wild Wings, Inc. (BWLD), which he says has had a solid 2012, because it started with a strong fourth quarter. However, he likes BWLD because of its experience-based advertising and marketing campaign.
“I think also they’re at an inflection point of hitting that broader national public awareness, and so that’s why I think you’re seeing the same-store sales accelerate to industry highs. Year to date, same-store sales are running nearly 13%, which is extremely big for a system that has nearly 850 units,” Slabaugh said.
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