Restaurant Stocks: Fast Food Adds Booze to Gin Up Profits

Fast food restaurants are apt to add beer and wine to menus, if only because their competitors are doing the same

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Restaurant Stocks: Fast Food Adds Booze to Gin Up Profits

Care for a Budweiser with that Big Mac?

Starbucks185 Restaurant Stocks: Fast Food Adds Booze to Gin Up ProfitsThat might have been an unthinkable combo just a few years ago, but don’t be shocked if you’re soon able to enjoy a cold beer with a burger and fries at your local fast food joint.

In fact, it’s already happening, and the response to those early alcohol programs has been solid enough for most of the major fast-food restaurant stocks to consider diving into — or diving deeper into — beer and wine sales.

Booze and Fast Food Already a Proven Pair

Truth be told, when Starbucks (SBUX) began selling beer and wine at one locale in 2010, it wasn’t a significant stretch for the ambience-focused chain of coffee houses. Patrons were already sitting down and staying a while, there for social reasons more so than for a dose of caffeine. Bars play the same role, so the leap was a fairly easy one for Starbucks.

The response to the program was so strong, however, the company added alcohol to a small tranche of venues in 2012. Still finding big success in those stores, in March of this year the chain of coffee shops announced it was going to expand its beer and wine offer by adding it to the menu in thousands of its shops over the next few years.

Starbucks is hardly the only partial-service, sit-down eatery to wade into spirits sales, however. Its success has spurred other fast food restaurant stocks to do the same. Chipotle Mexican Grill (CMG) got into the game a few years ago at select stores by offering beers and margaritas. Again, it makes sense. Nothing washes a premium burrito down like a margarita or a Corona. That’s why similar chains like Moe’s, Baja Fresh and Qdoba also offer beer at select stores.

That’s not where the union of fast food and booze stops, however. Fast food restaurant stocks have quickly warmed to the idea. Indeed, the two worlds have collided in places that few would have ever expected just a few years ago. For instance…


Article printed from InvestorPlace Media, http://investorplace.com/2014/04/fast-food-restaurant-stocks-sbux/.

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