It might not be good for America's waistline, but froufrou dining off petite plates is out. The recession has made us hungry for family-size piles of comfort food, skyscraping burgers and all-you-can-eat fries.
Like other segments of the retail economy, the restaurant industry has struggled over the past two years as unemployment has soared and consumers have curtailed spending. The National Restaurant Association's performance index shows the industry has been shrinking for 23 months in a row. High-end bistros have fared the worst, with sales at fancy restaurants such as Ruth's Chris and Morton's steakhouses off by 20% or more as corporate customers pare expenses and other diners trade down.
Casual- and family-dining places have suffered, too, as people eat out less, order more takeout or cook at home. Even fast-food chains such as McDonald's (MCD, news, msgs) and Burger King (BKC, news, msgs) have lost business despite dollar meals and other deals meant to keep the fryers sizzling.
Still, as in other whipsawed industries, a few survivors stand to benefit from the widespread pain. To figure out who they are, I analyzed data provided by financial research firm Capital IQ, a unit of Standard & Poor's, to see which publicly owned restaurant companies with at least $250 million in annual sales have gained revenue and market share since the recession began near the end of 2007. Then I researched earnings reports and other sources to separate companies with strong inherent growth from those that have simply benefited from mergers, accounting anomalies or one-time events.
More from MSN Money and U.S. News & World Report
And all of these companies are financially healthy, with reasonable debt and the wherewithal to keep expanding despite a credit crunch.
1. Buffalo Wild Wings
Hot wings, zesty drinks, low prices and a funky sports-themed atmosphere seem to draw crowds to Buffalo Wild Wings (BWLD, news, msgs) no matter how the economy is doing.This Minneapolis chain with outlets in 41 states has grown rapidly over the past two years, thanks to its plan to open about 60 restaurants a year. Same-store sales have risen slightly, with expansion juicing overall revenue by about 31% so far this year. Profit is up by 34%, and the company says the grand openings will continue.
2. BJ's Restaurants
Managers might be tempted to belly up and drown their sorrows, since the majority of the 89 BJ's Restaurants (BJRI, news, msgs) are in deep-recession states such as California, Arizona and Florida.
Video: 'Fast' casual dining takes on fast food
But the company's homemade ales, Chicago-style pizza and deep-dish cookies seem to offer some comfort from the gloom, and nine restaurant openings in 2009 have helped drive net income up 41% so far this year. The company hopes to open nearly a dozen locations next year and ramp up expansion even more once the economy improves.
3. Chipotle Mexican Grill
The fast food at these casual eateries feels slow, thanks to organic ingredients, custom combos and an emphasis on freshness. Traffic is down at many locations, but Chipotle Mexican Grill (CMG, news, msgs) has been able to compensate by raising prices, a recession rarity that signals how popular Chipotle's burritos and spicy salads are.
The company has also been able to continue a breakneck expansion plan, with openings for 2009 and 2010 likely to total about 250. Price increases and expansion have boosted profit by 55% so far this year.
Continued: More food for less money
Rate this Article
High
