Restaurants
Restaurant Sales Trends
Sales and traffic growth for the week ending October 3rd were the weakest since mid-June. Sales growth for all segments except for fine dining deteriorated during the last two weeks in September compared with the first three weeks of the month. The slowdown in sales growth was driven primarily by family dining and quick service. Dine-in sales growth is negative for all industry segments except fine dining. However, quick service, fast-casual and fine dining improved in their dine-in sales growth during the last two weeks of the month. A decline in off-premise contributed to the slowdown in sales for limited-service brands over the last three weeks. For full-service restaurants, off-premise sales growth has been slowing from very high levels. The best performing regions were the Southeast, Florida, California, and Texas. The worst performing regions were New York-New Jersey, New England, the Midwest, and Mid-Atlantic.
Food at home vs. away from home
The differential between food at home and food away from home narrowed to 0.2% in September. It was the most negligible differential since February. Food away from home inflation was 4.7% YOY and flat with August. On the other hand, food at home accelerated to 4.5% YOY from 3.0% in August.
Consumer Staples
Food at home accelerates
Food at home inflation accelerated to 4.5% in September from 3.0% in August. The two-year average accelerated to 4.3% from 3.8% in August. The meat, poultry, fish, and eggs sub-category had the highest YOY inflation rate at 10.5% in September, up 8.0% in the previous month. The second-highest rate was fats and oils, up 6.9% YOY from 5.5% in August. Fruits and vegetables increased 3.0%, accelerating from 2.3% in August. Other food at home accelerated to 3.1% from 1.5% in August. Cereals and bakery products increased 2.7%, accelerating from 1.6% in August. Dairy increased 0.6%, accelerating from a 0.5% decrease in August. Alcoholic beverages increased 2.8%, accelerating from 2.6% in August.
Social Security adjustments
Social Security is issuing the most significant increase in benefits in 40 years. The cost-of-living adjustment (COLA) for Social Security will increase by 5.9% in 2022, compared to 1.3% in 2021. That will average $92 for each retiree per month or $1,657 annually. Retired couples will receive $154 per month. There are 65 million Americans or about one in five people who receive Social Security. For 12 million workers, the taxable wage base will increase 3% from $142,800 to $147,000 at 6.2% or a maximum of $9,114 from the employee (and employer). Social Security benefits represent about 30% of the income of the elderly. According to the Bureau of Labor Statistics Consumer Expenditure Survey, the average retiree household spends $6,600 annually on food, representing 13% of average expenditures. While spending on housing, transportation, and healthcare is larger, food expenditures are more variable.
On-premise beer sales improve (BUD)
The rate of sale at on-premise establishments grew for the fourth straight period, according to BeerBoard, which tracks on-premise sales at bars and restaurants. During the weekend of October 7-10, on-premise sales grew 6% over September 23-26. Nationally the on-premise rate of sale increased 23.6% compared to the same weekend in 2019. Volumes were up 4.7% for the weekend of October 7-10 compared to September 23-26 but were down 16% nationally to 2019. Buffalo Wild Wings’ beverage innovation manager said the chain’s beer sales are approaching 2019 levels.
