Coverage

Over the last 10-15 years, multiple large restaurant concepts have launched a breakfast daypart in the U.S., with varying degrees of success (or lack of it). These concepts include three of the largest (top-ten sized) U.S. restaurant concepts, Taco Bell (4th-largest domestic restaurant concept, as ranked by U.S. systemwide sales), Burger King (7th-largest), and Subway (8th-largest). Which brings us to the question: which large, quick-service restaurant concept that doesn’t currently have a meaningful breakfast business, might have the courage one day to launch a breakfast business?

Recently, Domino’s, Pizza Hut (owned by Yum Brands [YUM; Neutral, $132.88]), and Papa Johns all reported their Q3 2024 U.S. same-store sales. In this report, we discuss how these same-store sales results — and potential results for full-year 2024 — relate to these three concepts’ average unit volumes (AUVs). We further discuss what this means for the companies, and their stocks.

McDonald’s, Wendy’s, and Burger King (owned by Restaurant Brands International [QSR; Not Rated]) each recently reported their Q3 2024 U.S. same-store sales. In this report, we discuss how these same-store sales results — and potential results for full-year 2024 — relate to these three concepts’ average unit volumes (AUVs). We further discuss what this means for the companies, and their stocks.

Data out today from the U.S. Census shows that restaurants’ market share (with grocery stores/supermarkets making up the other component) was 56.4% in October 2024. This is a new all-time high for the domestic restaurant industry in this regard. The year-over-year gain was about +40 basis points, marking slight sequential acceleration from September 2024’s +30 basis-point market-share rise.

The latest Consumer Price Index (CPI) data shows that prices for food-at-home (grocery stores and supermarkets) rose by +1.1% in October — sequentially down by -20 basis points from September’s +1.3%. This +1.1% number compares with price for food-away-from-home (restaurants) that increased by +3.8% year-over-year in October (sequentially down by -10 basis points from September’s +3.9%). This marks the 20th month in a row for which restaurant pricing is outpacing grocery/supermarket pricing.