This Week in Food and Restaurants
by Aristotle Munarriz (MF Edible)

Miami, FL. (March 14, 1997) -- It was Musical Chairpersons yesterday as food company heads ran around looking for vacant seats.

We lost one for good. LUBY'S CAFETERIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LUB)") else Response.Write("(NYSE: LUB)") end if %> was halted in late trading when CEO John Curtis Jr. died from multiple self-inflicted stab wounds. The suicide was but another grim chapter for the company. Back in 1991, a gunman entered a Killeen, Texas, Luby's and opened fire, killing 23 patrons before fatally shooting himself. It was the worst mass shooting in this country's history.

Curtis had only been the CEO for two months, but had been with the company for 18 years, rising through the ranks and serving as CFO and President, helping to make the Texas-based chain a steady performer in recent years. Despite fluctuating food costs and restaurant industry slumps, he managed to help steer the company to year after year of higher earnings and dividend hikes like clockwork. While analysts had begun to sour on the company, lowering their earnings estimates on the Texas-based chain from $1.81 to $1.68 over the last few months, that is still higher than the $1.66 the company earned in its last fiscal year. Investors will be quick to wonder if the death of the CEO will have an impact on the stock. As a humanitarian, maybe it's just best to mourn the passing of Curtis and acknowledge the achievement of the 220-unit cafeteria chain.

PENN TRAFFIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PNF)") else Response.Write("(NYSE: PNF)") end if %> shares soared yesterday when it was announced that Phillip E. Hawkins would head the company. While few may know the Northeastern grocery chain -- with store names Big Bear and Bi-Lo -- few need to be told the impact Hawkins had on his former post at VONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VON)") else Response.Write("(NYSE: VON)") end if %>. Over the last four years shares of Vons have grown fivefold as Hawkins championed efforts to increase everything from employee morale to customer perception of the supermarket company.

Also chair shuffling was GRAND METROPOLITAN <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GRM)") else Response.Write("(NYSE: GRM)") end if %> as Dennis Malamatinos replaced Robert C. Lowes as CEO of the Miami-based Burger King subsidiary. Burger King performed well domestically over Lowe's two-year tenure. Malamatinos, whose expertise lies in international operations, will now guide the world's second largest fast-food chain into what will certainly be an interesting year of burger wars.

Not to be outdone, Arvid C. Knudston assumed the vacant position of CEO for MICHAEL FOODS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MIKLD)") else Response.Write("(Nasdaq: MIKLD)") end if %>. Yes, the winds of change were a bit of a gale storm yesterday, all this to say nothing of the international divestitures most expect HEINZ <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HNZ)") else Response.Write("(NYSE: HNZ)") end if %> to announce later today at a San Francisco analyst conference.

THE EDIBLE EIGHT

Nearly double-digit percentage gains in QUALITY DINING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QDIN)") else Response.Write("(Nasdaq: QDIN)") end if %> and RAINFOREST CAFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %> this past week helped hoist our modest wish-list 3% higher as the market went the other way. From last year's 33% rise, and the subsequent brutal January which found the E8 off 6%, whispers of "beginners luck" and "sophomore jinx" were more than audible to me. Well, why not, when I was one mumbling those very words? Still, we are now up 3% this year, and while not quite up to blue-chip snuff, it is now better than a flat secondary market and the IBD: Retail Restaurants Index which continues to wade underwater.

While certainly nothing to write home about it was certainly a positive week, in more ways than one, and hopefully we can put away our snorkel gear for the rest of the year.

1997 Returns To Date:

The Edible Eight        +3.0%
NASDAQ                  +0.2%
S&P 500                 +6.6%
Fidelity Sel: Food      +6.5%

Until next week, Digest Foolishly,

MF Edible

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