More Americans are choosing to eat at home since grocery prices are pretty cheap. That’s been hurting profits for restaurant companies — and it might lead to more mergers because these chains must become more competitive.
Panera Bread, one of the leaders in the so-called fast casual dining industry, could be the latest to sell. Shares of Panera soared nearly 8% Monday following reports that the company might put itself on the shopping block.
There was speculation that McDonald’s, Starbucks, KFC parent company Yum!, Krispy Kreme and Peet’s owner JAB, or even pizza king Domino’s, might be interested in the company.
McDonald’s might be a stretch. Under newish CEO Steve Easterbrook, the company seems more focused on modernizing its own menu instead of buying another chain.
And Starbucks, despite an increased focus on food in its own restaurants, might not be that likely of a buyer either — especially since Kevin Johnson just took over from Howard Schultz as CEO this week.
Panera neither confirmed nor denied the reports. A spokesman for the company emailed the following comment to CNNMoney from Panera CFO Michael Bufano: “As a matter of policy, we never comment on rumors or speculation.”
But a sale of Panera would be just the latest restaurant deal. Takeovers are clearly on Corporate America’s menu.
Burger King owner Restaurant Brands agreed to acquire chicken chain Popeyes Louisiana Kitchen for $1.8 billion in February.
And there have been rumors this year that another chicken joint — El Pollo Loco — could be a takeover target as well.
Bob Evans Farms announced in January that it was selling its restaurant business to private equity firm Golden Gate Capital for $565 million. Golden Gate acquired Red Lobster from Olive Garden owner Darden Restaurants in 2014.
And Darden just announced a deal of its own, agreeing last week to buy casual dining chain Cheddar’s Scratch Kitchen for $780 million.
Popular sandwich chain Jimmy John’s sold a majority stake last September to investment company Roark Capital as well
Roark also has a big investments in Focus Brands — the parent company of Cinnabon, Moe’s Southwest Grill and Carvel.
And it’s an owner of both Arby’s and CKE, the owner of Carl’s Jr. and Hardee’s, which up until recently was run by former Trump Labor Secretary candidate Andrew Puzder.
So don’t be surprised if your favorite place to dine out winds up being bought — or scoops up another chain — sometime soon.