NRCP continues to compile quarterly results for labor comparisons for the publicly traded restaurant companies and posting them with commentary. 2017 ended with a nearly $300 million increase in labor costs; costs that should be managed better. We will continue to track labor costs in 2018 so stay tuned.
The QSR segment lost $87 million, including the enormous gain ($62.3 million) posted by Chipotle (CMG). Without Chipotle, the loss for the segment approached $150 million. McDonald’s (MCD) experienced $85.9 million in higher labor costs in fiscal 2017; accounting for nearly all of the loss by the industry. Most companies reported consistent outcomes, each quarter reporting roughly the same dollar amount in higher labor costs. El Pollo Loco (LOCO) had a wild ride with swings in its quarterly results; as did Luby’s (LUB). YUM Brands (YUM) posted consistently positive comparisons.
The Casual Dining segment collectively lost $135 million in 2017. The big 6, Bloomin’ Brands (BLMN), Texas Roadhouse (TXRH), Brinker (EAT), Cheesecake (CAKE), BJ’s (BJRI) and Darden (DRI) cumulatively generated $114.4 million in higher labor costs, or nearly 85% of the industry’s losses. Red Robin (RRGB) and Denny’s (DENN) each showed consecutive quarterly improvements, and ending the 4Q17 with positive labor cost comparisons. Cracker Barrel (CBRL) was the only company to report positive labor costs for the full year. At least three other companies still hold that chance when they report.
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National Retail Concept Partners, LLC is a full-service consultancy based in Denver, CO. working with a variety of industries, including the automotive, retail, restaurant and hospitality industries. Partners Larry DeVries and Dean Haskell wrote the preceding post. These recurring posts can be accessed at their LinkedIn profiles. NRCP recently shared its labor optimization success at the Restaurant Finance Conference. The partners can be reached by email at firstname.lastname@example.org email@example.com. Mr. DeVries is based in Denver, Colorado and Mr. Haskell is based in Nashville, Tennessee.