4th Quarter Reports for National Chains Not Good

Financial analysts, looking to the hospitality sector to lead an economic recovery, got some disappointing news as year-to-year figures were released for a number of chain restaurants. Most were flat or in a state of decline.

And even the usually reliable fast food segment reported drops in same-store sales. For example, Sonic Corp was down 6.5%. CKE restaurants were also down 6.5%. This may account for McDonald’s recent decision to stop charging $2.95 per two hour segment for WiFi and offer the service for free. If that occurs, Starbuck’s may be forced to follow that lead.

On the higher end side of the chains, Kona Grill reported an 8% decline in sales, this coming on an already poor previous year. The news was also not that rosy for Chili’s, Appleby’s, and other medium price point chains.

And have you seen the recent gamble that Domino’s took with its national ad campaign? The ad basically acknowledges that they suck. And if you don’t like their sparkling new improvements, you’ll get your money back. Are you kidding me? Kind of sounds like whistling past the graveyard, doesn’t it? Domino’s has sucked for years and they’re still awful. No commercial is going to change that. Doesn’t look like I’ll be adding them to my portfolio any time soon.