Cheesecake Factory (NYSE: CAKE) operates 147 upscale casual dining restaurants under its namesake in the United States. The company also includes 13 Grand Lux Cafes, a growing secondary chain with a more upscale design.^[1] The company is unique in that it offers both a broader menu selection and more upscale experience than many of its more casual peers. It is also able to compete with more upscale restaurants, by pricing its selections on the lower end of the upscale casual dining spectrum. Because Cheesecake Factory restaurants operate near capacity, opportunities for same store sales growth are limited. Instead the company has achieved steady growth by increasing its number of stores. At the same time, the company has successfully established both Grand Lux and Cheesecake Factory as two distinct brands in the eyes of consumers, giving the company the opportunity grow both concepts without fear of cannibalization.

In a sluggish economy, even upscale restaurants can feel the effect of consumers tightening the grip on their wallets. The Cheesecake Factory feels this effect even more-so because of it's position as a low-price upscale restaurant. Because its position attracts inspirational middle-class and even lower class consumers, the consumers that feel the effects of a sluggish economy the worst, the Cheesecake Factory will feel the negative effects of these customers cutting back on spending. With lower traffic flow, the company's bottom line will suffer. As a result, in 2009 the company's comparable store sales growth at its restaurants was -2.6%.^[2]

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