QSR Magazine: 4 Financial Factors to Watch in 2018

The restaurant industry is hoping for a better year in 2018 after seeing declining sales and traffic in the limited service category. According to a recent QSR Magazine article, the horizon is already looking better due to an improving economy but multiple factors will play a role in how this year will play out.

Along with the economy, M&A and private-equity investments should continue for the rest of the year even though IPO activity is predicted to stay fairly quiet. “That’s going to be strategically the way that some companies feel as if they can compete more effectively or get more scale,” said Andy Barish, managing director of equity research at investment banking firm Jefferies, of quick-service mergers such as Panera Bread’s acquisition of Au Bon Pain.

Finding top talent is still an issue as unemployment stays at a low rate of four percent and minimum wage is increasing for 14 states this month. While a rising minimum wage could create challenges for restaurants, it may also put more money in the pockets of those with lower to middle income.

Technology investments help brands increase efficiency and productivity but don’t come at a low cost. “That’s been costing a lot of quick-service brands money and will likely continue to as they invest behind some of those areas for 2018, with hopefully some path for incremental sales with delivery and online ordering,” said Barish.

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