What’s for Dinner? The Big Business of Food Service Continues to Evolve
February 16, 2020 5:00 AM
by Judy Loy
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By Judy Loy,
Registered Investment Advisor, ChFC® and CEO of Nestlerode & Loy, Inc.

If you are like me and my husband, Steve, the common question during the workday is “What’s for dinner?” We both work full-time with no kids, so sometimes the refrigerator is empty. State College has local and chain restaurants as well as convenience stores that are more restaurant than gas station. 

Overall, the restaurant landscape has changed in big ways in State College since I moved here almost 30 years ago (boy I feel old). We had the Surf Club (now Jax Bar and Kitchen) and The Boalsburg Steakhouse (now Kelly’s). We still do have the original Champs Sports Grill, The Tavern Restaurant and the Corner Room. Back in the day, Centre County people had to travel to Altoona for Olive Garden or Red Lobster.  

The restaurant industry has also gone through a transition. Fast food now has the Impossible Burger, and most have kiosks rather than all cashiers. Gas stations are now a go-to for made-to-order food or even authentic Mexican. Uni-Mart on West College Avenue has a Mexican Restaurant named Lupita’s that sells good food. Sheetz provides kiosks where you can customize your meals and get premium coffee. I had a coworker that introduced me to their cheese sticks, and they are dangerously good.  

Over the last 10 years, food services sales in convenience stores grew at a higher rate than any other area in the store, according to CNN’s research from an industry trade group. Millennials are leading the trend as they eat out more often and prefer convenience. Sheetz sees its biggest competitor as McDonald’s (MCD). While McDonald’s (MCD) is public and trades on the New York Stock Exchange, Sheetz is privately owned and is based in nearby Altoona. 

Many chains are under one large conglomerate that are publicly traded. Darden Restaurants (DRI) owns many prominent restaurants. Olive Garden, Longhorn Steakhouse, The Capital Grille and Seasons 52 are held under their umbrella. One of my favorite restaurants in Pittsburgh is Eddie V’s and I had no idea they were part of the Darden group. 

Another major player is Restaurant Brands International (QSR), which is based in Toronto, Canada.  While Tim Hortons (Canada’s answer to Dunkin Donuts) is a stalwart for our northern neighbors, Restaurant Brand also owns Burger King and Popeyes. That’s right: “Louisiana Kitchen,” straight from Canada.

Yum Brands (YUM) has the most imaginative name and symbol and is in good ole Louisville, Kentucky, with its headquarters on Colonel Sanders Lane, which might clue you into one of their restaurants. Pizza Hut, Taco Bell and KFC are all part of the brand.

Domino’s Pizza (DPZ) trades under its own name and is headquartered at Ann Arbor, Michigan. Starbucks (SBUX) also trades as a single company. The behemoth in the fast food industry, McDonald’s (MCD) gets its revenue from its namesake brand, which now allows you to order breakfast whenever you want! McDonald’s spun-off Chipotle Mexican Grill (CMG) in 2006. According to Forbes, McDonald’s still holds the top spot as the number one international fast food restaurant with KFC and Subway rounding out the top three.  Subway is a privately held restaurant franchise and has locations in 100 countries.

Food is big business and there are more ways and places to get food than ever before.  Between Grubhub (GRUB), DoorDash, Home Chef, HelloFresh (HFG) and Amazon (AMZN) Pantry, you hardly need to leave the house to get a good meal.

Nothing contained in this article should be interpreted as a promise or guarantee of earnings or investment results nor a recommendation for the purchase or sale of any security or sector.

 

Disclaimer: The views and opinions of the authors expressed therein do not necessarily state or reflect those of StateCollege.com.

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