4 Clever Chains That Turned Low-Brow Eats into Cuisine
All of that has changed, and it's often been a single company that reshaped public perceptions. Let's take a look at four of the more prominent publicly traded disruptors and innovators in the restaurant industry.
Chipotle Mexican Grill (CMG)
Before Chipotle came on the scene, burritos were mostly limited to cheap fast-food varieties or served at casual-dining joints where they raved about their margaritas while you put up with a strolling mariachi band. Chipotle changed all that, and the market darling fueled the fast-casual revolution that continues to thrive to this day.
The chain, which now boasts 1,724 restaurants, is growing at a frenetic pace. Revenue and earnings climbed 31 percent and 56 percent, respectively, over the prior year in its most recent quarter. Expansion and a jaw-dropping 19.8 percent spike in comparable-restaurant sales helped drive that growth. A springtime menu pricing increase is a factor in the surge, but what's even more important is that folks continue to line up for its food despite the chain's first substantial price hike in three years.
Howard Schultz was inspired by Italian coffee bars and the romance of the European brews. He took the small Starbucks chain, transformed it, and premium coffee will never be the same.
Starbucks has grown to 20,863 locations, with 13,912 in the U.S. It expects to add another 1,600 stores next year.
We can either blame Starbucks for the pumpkin spice and iced coffee crazes, or we can embrace its success. Starbucks made coffee cool, and its recent expansions find it trying to do the same thing for tea, juice bar concoctions and other beverages.
Panera Bread (PNRA)
Panera Bread got its start as the Saint Louis Bread Company, and was acquired by Au Bon Pain before breaking out as a solo act. Bakeries and sandwich shops weren't terribly appealing as major national chains outside of submarine sandwich concepts, but Panera Bread found a way to make the old-school staples of sandwiches and soups seem cool to mainstream audiences.
Panera Bread's growth has slowed lately. Competition has started to heat up, and analysts see flattish profit growth for all of 2014. It still helped change and shape the fast-casual industry, though, even if it hasn't been at its best lately.
Buffalo Wild Wings (BWLD)
Sports bars are often mom-and-pop chains that rally behind the home team. Buffalo Wild Wings has changed all that by using franchisees and company-owned locations to rapidly expand its family-friendly venues that specialize in chicken wings. Families and sports fans are surrounded by TVs broadcasting live sports. This isn't the kind of environment that's been historically child-friendly, but then again you won't find too many sports bars prominently showcasing their children's menu, as Buffalo Wild Wings does.
The approach is paying off. Shares soared on Tuesday after another blowout quarter, with revenue and net earnings soaring 18 percent and 22 percent, respectively. Same-store sales increased 6 percent at its company-owned locations and 5.7 percent at franchised eateries, but that's not a surprise. Since stumbling during 2010, comps have clocked in higher for 15 consecutive quarters.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Buffalo Wild Wings, Chipotle Mexican Grill, Panera Bread and Starbucks. Try any of our Foolish newsletter services free for 30 days. To feast on our favorite high-yielding dividend stock ideas for any investor, check out our free report.