Restaurants - Executive Summary Q2 2019

Published on: 06/17/2019

While restaurants continue to be challenged by declining traffic and increasing labor costs, same-store sales rebounded to show a 1.1% increase in May and provide a cautiously optimistic outlook for the industry, according to TDn2K’s Black Box Intelligence. Additionally, top emerging brands continued to grow their footprints in excess of 35% on average, highlighting the ongoing bifurcation in the industry.

Technology is a key driver of deal activity as digital tools such as self-order, self-pay, and delivery become increasingly important to consumers. Recent tech-driven deals include Sweetgreen’s acquisition of delivery service Galley Foods (June, undisclosed); McDonalds’ acquisition of personalization platform Dynamic Yield (March, $300 million); and Starbucks’ $100 million investment in food technology startup fund Valor Siren. Notably, of the $11.2 billion invested by venture capitalists in restaurant technology since 2014, $5.8 billion been for ordering and delivery technology, according to PitchBook.