Grab your knife and fork -- it sounds like a lot of people already have.
Talk of economic recovery seems to have worked up some consumer appetite, judging by increased same-store sales at both Applebee's (NASDAQ:APPB) and Outback Steakhouse (NYSE:OSI). November same-store sales at Outback rose 4.8%, while Applebee's grew 5.1% for the month. Both restaurants are popular venues, and tend to operate in well-populated areas that shoppers frequent, so it should be interesting to see what December numbers will hold.
If consumers are feeling more festive and shopping till they're dropping, will that make them more likely to drop by a restaurant? Or will gift-buying expenditures make them more likely to economize and do their dining at hoppin' fast-food chains like McDonald's (NYSE:MCD) or Wendy's (NYSE:WEN), or in the most casual setting of all, their own homes?
If the wait lines at Outback and Applebee's prove too long, another denizen of the casual-dining chain sphere, Ruby Tuesday (NYSE:RI), was spotted as a quieter contender by Fool Rick Munarriz in October. The company recently revamped its menu to include a variety of low-carb, high-protein items. Eating out on Atkins isn't always easy, and Ruby Tuesday has made a play for that niche.
Among the other casual-dining chains to watch should be Darden (NYSE:DRI); it hasn't released its November sales figures yet, but it should be interesting to see if its recent troubles continue.
Just in time for Thanksgiving feasts, the National Restaurant Association reported an improving outlook for the restaurant business last week. According to its Restaurant Performance Index, 56% of operators reported same-store increases between October 2002 and October 2003, and many expressed optimism about the future after several tough economic years.
Is the improving economy packing restaurants? Your fellow Fools want to know on the Applebee's and Outback discussion boards.
Alyce Lomax welcomes your feedback at [email protected].
