Restaurant Sales and Traffic Growth Declined Year Over Year
Data through the week ending March 20, 2022
According to Black Box, the restaurant industry's same-store had seen 54 consecutive weeks of positive same-store sales. As of the week ending March 20, that streak ended and the industry is now seeing a significant slowdown, suggesting continued weakness for the foreseeable future. Fine dining and upscale casual were the only two segments with positive traffic growth during the week. Quick service, fast-casual and casual dining had the weakest year-over-year traffic growth. Average check growth dropped for all industry segments during the week. Sales growth has been positive for all US regions from the first week of February until the week ending March 20. Five regions dipped into negative sales growth territory: the Southwest, Texas, the Midwest, Southeast, and New York-New Jersey. The regions with the most substantial sales growth during the week were California, New England, Florida, and the Mid-Atlantic.
Restaurant Spending
Sakes for the industry were going to slow without higher gas prices. Delivery will not be immune from the slowdown.
Nearly half of American consumers are cutting back their restaurant spending because of soaring gasoline prices, with the pain at the pump likely to translate into shorter orders and a shift to less-expensive places, according to a new report from the research firm Technomic. Technomic found that the topline impact of rising gas prices is slightly sharper right now for limited-service concepts than it is for full-service operations. About 49% of consumers surveyed for the report said they're cutting back spending at quick-service places, compared to the 48% who indicated they're more conservative when visiting table-service places.
Is GOPUFF getting another $1.0 Billion?
A well-capitalized competitor like GoPuff will make it more expensive for DASH to gain market share in the ultra-fast delivery space.
According to Bloomberg, GoPuff is near to closing a $1 billion funding. The other day it was rumored to be cutting hundreds of jobs to improve profitability. According to the article, the latest investment is being led by Guggenheim Partners and will come in a convertible note. The additional capital would add to Gopuff's current cash position of $2 billion. GoPuff was valued at $15 billion last July. We see similarities to 2017/2018, when DASH was a private company competing against GRUB. DASH made life very difficult for GRUB having to limit spending and focus on profitability. How much will DASH have to spend to achieve 19% GOV growth guidance in 2022?
