Restaurant Industry Update
SUMMARY: Restaurant traffic and revenue declines in the later part of 2022 gave indication of inflation driven belt- tightening across the economy. Operators began to see labor constraints lessen, enabling further recovery and expansion potential going into 2023.
Same-store Restaurant sales growth declined 3.4% year- over-year in November 2022 and when compared to growth rates for both September and October, sales dropped 1.8 percentage points. Store traffic was down too, off 4.3% in November, down by 1.1 percentage points relative to the previous month, the worst outcome for the industry since July. November could preview trends to come as traffic softens, bringing moderation in sales growth. As the past year’s menu price increases start abating, as is expected, it will be increasingly harder for restaurants to post strong positive same-store sales growth as was the case for most of 2022. Based on their 3-year same-store sales growth, the segments that performed the best fell under the limited- service category: quick service and fast casual. These segments continue to be better positioned to generate demand from guests looking to moderate their spending when eating out. Nations Restaurant News – Black Box Data Some good news for restaurant operators, hourly staffing levels appear to be recovering, now nearing pre-COVID staffing levels, down just 2% from October of 2019. Full-Service restaurants as a segment are nearing 2019 pre-pandemic levels, however limited-service trails 2019 staffing by 12%. NRN, Technomic, US Bureau of Labor Statistics
Q1 2023 Market Update
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