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February 28, 2008
Triangulating the Trends
February 28, 2008
I had dinner this week with a restaurant CEO who is a 30 year veteran of the industry, and a Wall Street restaurant analyst who has been following our industry for over 15 years. The purpose was to talk about the industry, not our particular company affiliations. My experience in dealing with analysts reminds me a lot of going to the dentist. Nothing really bad will happen as long as my mouth is closed, but when it opens the pain can last for an indeterminate amount of time.
Fortunately, this was a case of friends gathering over a steak dinner to talk about a wide ranging list of topics on the restaurant industry. I must confess, I am always amazed at the insights that the analyst community possess about our industry. We work in it day to day and pick up a lot of knowledge along the way about how things work, and how to get things done. We analyze it from the inside looking out.
Research analysts come at it completely differently. They are on the outside looking in, but are looking in with an array of data, comparisons and benchmarks that are powerfully revealing. One of the things that makes analysts so insightful about our industry is their constant dialogue with the companies that they follow. Talk to one company, and you learn a little. Talk to a lot of companies, and you learn a lot.
There is one big difference among analysts. They all follow companies. That is the job. Beyond that, some separate themselves by becoming students of the industry, not just the companies that are of interest. There are two different ways of studying the industry. Most analyze the supply side of the business. They track the trends of the restaurant categories and try to determine if QSR might move quicker than casual dining, etc. based upon the performance of the companies within the categories.
Very few study the industry from the demand side. What is the consumer doing/demanding and what are the implications on the companies within the various segments of the industry? What has been the customer driven evolution of the industry over the decades and where is it likely to lead? Where are the financial “sweet spots” of different pockets of restaurant concepts?
We can’t spend the time analyzing the industry the way that research analysts do. If we did, there would be nothing left to analyze because we would slowly go out of business. However, we can read the reports that this elite group of researchers produce. And I don’t mean the reports on your company, or your competitor’s company. Look for the reports on industry and consumer trends. You just might be surprised at what is going on out there.
Posted by Lane Cardwell on February 28, 2008 | Comments (1)
Reader Comments
at 2/29/2008 12:29:09 PM, Scott commented:
It would be more beneficial to look at geographic trends due to differences in demographics, values, ethicities, economies and track them. In my case, I live in the Bay Area and with technology being just a bit south of me and wine country just a bit north the tourism business is stellar and so is the need to keep San Francisco in the top food cities of the world. So who are the researchers who have Bay Area expertise?
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