Personally I think it’s a great time to buy calls on some depressed but healthy names. I like Bloomin Brands, McDonald’s and Jack in the Box. Not sure honestly why they’ve taken such a hit over the past 4 months other than inflation and a minimum wage hike but feel free to chin in and educate me.
MCD
BLMN
JACK
Anyone know what’s up with the Restaurant industry?
byu/No_Calendar1833 inwallstreetbets
Posted by No_Calendar1833
41 Comments
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McDonald’s rolled out a new $5 meal deal last week nationwide to try and appear affordable again. McDouble/McChicken, 4 Mcnuggets, a small fry and a drink. Just like Wendy’s old 4-for-4. The president of McDonald’s America gave a great interview about it to [The Journal. ](https://www.wsj.com/podcasts/the-journal/mcdonalds-wants-to-offer-quality-and-value-can-it-do-both/5C6001F5-30F4-4C47-B586-581181A39936)
Quality went to shit, prices went to the moon. No idea why they might not be doing well
Higher food costs and labor. Bringing Higher prices. Now inflation on the home front has cut “eat out” money for recreational dining.
The perfect trifecta of a recession in the restaurant industry.
Short short short. Put put put.
You have a good read. No guarantee that the stock will drop when you want it to, but it will sooner or later.
Ice Cube’s Munchie Meal gonna blow up JACK’s next ER. Why?
THE CHURROS HOMIE!
Toxic industry. Labor issues, food issues, competition issues.
They’ve taken a hit. Because they are greedy corporations that are fucking the public, employees, and franchisees and it’s cheaper to eat at a sit down restaurant where you take leftovers home.
The sector I’ve found to be a little picky.
MCD I’ve had good returns on but it’s retreated back to my entry price.
QSR I’ve seen good returns on, slightly down from its peak.
Dutch Bros is catching back up slowly to its IPO price, has had solid growth while Starbucks has seen decline in share value.
Overall there’s a growth return to the industry, companies like Sysco could benefit in the near future too. But as another commenter said, labour costs, food costs, logistics cost have all been rising Y/Y.
I like the industry though and I’m positive on all positions.
Because for the same price you can get a meal prepared by somebody who went to cinerary school and cares about what they do. Buger Fries and Shake for the family will cost $125
Well outback just closed/is closing a bunch of locations so I guess that helps them save money but then also less revenue.
No wants to overpay for shit food anymore. Everything is too expensive and people don’t want to tip 20-30% either for shit service.
Just the reality now.
They’re all taking hits because fatties are spending money on ozempic shots.
Edit: I got perma banned for this comment 😀 fat fuck mod 
The restaurant industry is a race to the bottom. Profits are thin at individual locations. Franchises do better because corporate can squeeze the franchise owners to up corporate profits. A “successful” restaurant model is to create a good product at a reasonable price. Source cheaper and lower quality ingredients and hope no one notices. Continue until someone notices, then reinvent yourself as a slightly better version of your current self, but not nearly as good as you used to be. Hopefully, each passing generation gets dumber and doesn’t realize you are selling them marked up trash food. Repeat.
Every penny of “profit” is just the end result of fucking someone over. You’re either low-balling your suppliers or your employees or your investors or all 3. If you want to invest in a restaurant group, find one that’s ruthless (like Darden). Never invest in a restaurant because they’re “good” – that shit won’t last.
Long CAVA
its cheaper to go a restaurant and get a real burger 🍔 than any of these five guys mcdonalds horsehit places.
18$ for a fucking combo and you’re asking what’s sup with them?
Idk. Personally, I don’t think any of the sectors that rely on discretionary spending are going to do well in the next quarter or 2. A lot of companies have taken a hit but I don’t think it’s over until sometime after the first interest rate cut.
you’d think that with travel and hospitality being utilized, that supporting industries, like fast food would pick up some shrapnel
BUT – hotels have been so inflated as of late – $200 a night for a Best Western – means a cooler and food/snacks for many people
when I went to Chicago a few weeks ago, I packed water and snacks for that reason
Around here fast food prices have gone up far more than privately owned places has. The portions seem smaller and it was never close in quality to a locally owned place. Makes it an easy choice.
What are you recommending Small Caps? Is that what this is?
Garbage in Garbage Out.
I was in California a month ago and
In California all fast food workers now earn $20 an hour
This has lead to layoffs – longer wait times for food and the actual execution of the food you get is terrible.
You aren’t going to spend 15-20 on fast food when you get cold undercooked food
These names used to work because they provided value
A family or sleep an could go and eat
Now almost everyone’s knows they aren’t eating healthy if they do choose this topic and with food prices it’s just not worth it anymore
No value
I lived in the US my entire life and grew up on fast food and microwaveable food, I’m currently visiting Thailand and McDonald’s, Burger King, KFC are basically the same prices as I’d pay In the US which for Thai people is very expensive, who’s primary diet revolves around noodles
Food quality and service suck cox.net since Covid. I’ll cook my steaks at home where they taste better and I know the exact cut I’m getting.
McDonalds and other fast food have chains jacked up prices over the past 5 years and customers are no longer finding it cheap..and they are now racing to the bottom with these $5 value meals which will not be very profitable.
But MCDs is opening like 10,000 new restaurants over the coming years and under the franchise model they don’t put any money down really for a new location, so should continue to grow. Shares likely grind higher little by little over time, they only trade for 20 time earnings which isn’t that high for them historically.
What about $TXRH, $SHAK, or $CAVA?
I think the valuations are pretty high right now, but I wonder if they might do better long term….
Unless fast food restaurant announce like AI robots to take over labor, they’re gonna do shit
When budgets are tight the restaurant spending is one of the first discretionaries to get reduced/removed.
I’ve said it before and I’ll say it again. Jack In The Box has no business being where it’s at with those fucking egg rolls. So fucking good.
That’s literally why
Inflation and supply chain problems have led to things like their cardboard boxes going up in price, minimum wage hikes and competitive wage requirements have increased their personnel expense, the most expensive part of any business, and the market share has decreased since less people are eating at their restaurants overall
They’ve tried to price themselves out of the hole only to exacerbate the fleeing market, why spend 12$ on a meal at McDonald’s when chilis will sell the same meal but higher quality in every way?
It’s just more cost effective to eat at home right now. Way better quality if you know what you’re doing as well.
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A large Big Mac meal is like $14. Why would anyone want to pay that instead of going to a small/family owned burger joint is beyond me. Long TOST/SQ
They raised prices while reducing work force because of labor laws and are somehow surprised it’s falling apart.
Not all restaurants are doing poorly. Look at Texas Roadhouse, Domino’s Pizza, there’s outliers. The one commonality – they’re not overpriced – and the food is good.
I’m convinced fast food, even national chains, taste different depending on where you’re living.
13 years in the greater Tucson metro and McDonald’s is an EASY 50/50 shot from trash to “its food”. Any location. Shout out to the McDonald’s night crew @ the Sahuarita location for being easily the most constantly shit McD i ever went to.
A year now in Minneapolis metro. I noticed how things taste different here. Gone to maybe 4 or 5 locations since getting here and I’m getting picture perfect Double Cheese burgers no exaggeration, every time. They are cheap and honestly delicious here.
I’ve hated McDonald’s for so long and feel like I was cheated most of my adult life.
Still a shit evil company that’s gonna exploit that profit.
(Tbf, i haven’t been going nearly as much since they replaced the bogo double cheese w that stupid $5 box. )
yeah, i think this tipping expectation is pushing people to minimal interactions. Fast food is the way to go.
People don’t want to pay 25 bucks for a plate of excrement.
Have you been to any restaurants recently?
If rent goes up, workers will ask for more money to pay for the rent.
BROS looks strong, might go all in
Palestine protests and people are tired of fast food.
If you’re not sure why they’ve taken a hit you shouldn’t buy calls. At least educate yourself.