Get used to it: For restaurants, 2012 will look a lot like 2011. Well, much of it, anyway. Yet Bob Bielinski, Managing Director and head of CIT’s Restaurant Industry Practice, sees a few significant differences despite an economy that’s hampering a restaurant recovery.
The investment bank recently released an “outlook” study showing that while sales trends across all categories are likely to mirror last year not everything will remain status quo in 2012. Consider M&A. Bielinski explains:
For 2012, I think you are going to see a slower pace than you have over the past two years. There will be fewer headline transaction because of the dramatic turnover that’s already taken place in private equity portfolios. After all the transactions of 2010 and 2011 there simply aren’t as many mature deals left in private equity portfolios, and since private equity firms typically hold businesses for four to six years, the new owners of these businesses are not yet ready to sell their acquisitions.
Now, completely apart from private equity firms, if 2012 is a strong year from a sales and profits point of view, we could see the beginning of a cycle of franchisee consolidation as older franchisees look to retire and well-capitalized franchisees seek to build scale.
The entire transcript of Bielinski’s remarks (along with a short podcast) is here.