Mon Oct 05 14:39:00 -0400 2009

DowJones Newswires (New York)

- Some restaurant chains are buying more ingredients on the volatile spot market, with suppliers reluctant to sign long-term contracts while commodity markets are in a demand-based swoon.

More restaurant chains could follow Darden in shopping the spot market, said Tom Forte, restaurant analyst with Telsey Advisory Group, hoping any rise in ingredient prices will come with better same-store sales. “The hopeful upside to a strengthening commodity market is improving demand for dining out,” Forte said. “The risk is that if you don’t lock prices in, you have a strengthening commodity market without an uptick in sales.”

To view the full article, download the PDF here: Dow Jones Newswires, October 5, 2009