Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include McDonald’s Corp. (NYSE:MCD), Yum! Brands, Inc. (NYSE:YUM), Domino’s Pizza, Inc. (NYSE:DPZ) and Darden Restaurants, Inc. (NYSE:DRI).
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Here are highlights from Thursday’s Analyst Blog:
Can Deals Still Draw Restaurant Traffic?
According to a new survey from market research and global information company The NPD Group, the effectiveness of deals in driving traffic to restaurants has declined considerably. NPD’s foodservice market research says that compared to a year earlier, restaurants visits using a “meal deal” had declined by 3% in 2012.
Some examples of deals which are currently on offer include the $1 menu from McDonald’s Corp. (NYSE:MCD) and the $10 dinner box from Pizza Hut, which is part of Yum! Brands, Inc. (NYSE:YUM). Also, two-medium, two-topping pizzas are being offered by Domino’s Pizza, Inc. (NYSE:DPZ) for $5.99 each. One example from sit-down casual dining is Red Lobster, owned by Darden Restaurants, Inc. (NYSE:DRI), which offers a $7.99 lunch special.
Traditionally the most frequently used types of restaurant deals—combo meals and value menu item offers—were primarily responsible for the decline in traffic. However, visits based on coupons, “buy one, get one free” and discounted prices have increased.
These figures were captured by NPD’s CREST from more than 4,000,000 consumer restaurant visits every year. That said, this data in no way undermines the importance of deals in the restaurant business. Deals were the force driving visits during the peak of the recession when restaurant traffic had otherwise declined. Non-deal traffic had fallen by 1% while deal traffic gained 5% in 2008.