Chipotle Mexican Grill Shines in Sluggish Economy – Wendy’s Lags

NEW YORK, NY  (  As the global economy begins to sputter and US unemployment in the pivotal 18- to 24-year-old target hovers near 20 percent, fast food restaurants are focusing on deals and cost-cutting measures again. If share prices over the last month are any indicator, certain companies in the Restaurants sector are likely better prepared for the sluggish growth. The Bedford Report examines investing opportunities in the Restaurant industry and provides equity research on The Wendy’s Company (NYSE: WEN) and Chipotle Mexican Grill, Inc. (NYSE: CMG). Access to the full company reports can be found at:

According to studies found by NPD Group, the number of annual restaurant visits by a typical Millennial has plummeted from 245 visits five years ago to 192 this year. Meanwhile a National Restaurant Association survey finds that restaurant performance slipped to its lowest level in nearly a year as owners downgraded plans for capital spending and offered up their worst overall performance expectations in 20 months.

Soaring commodity costs, such as the spike in pork prices, has also compressed margins in the sector. Restaurants can only offer so much in the way of deals, as hog, chicken and beef prices soar.

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Chipotle Mexican Grill, Inc. has managed to handle the downturn quite well because its tip-less at-the-counter service is more attractive to consumers trying to save money. Its focus on locally grown and organic ingredients has also tapped into the growing number of health and environmentally conscious diners. The company plans to open 135-145 new restaurants in 2011, maintaining a growth rate of 13%.

Earlier this week Wendy’s introduced its remake of its 42-year-old hamburger. Dave’s Hot `N Juicy, named after late Wendy’s founder Dave Thomas, comes with extra cheese, a thicker beef patty, a buttered bun, and hold the mustard, among other changes. Wendy’s is trying to boost lackluster sales and fight growing competition from McDonald’s on one end and expanding fast-casual chains like Five Guys on the other.

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