Restaurant Industry Traffic
We are still in the middle of earnings, and the backward-looking view is coming up all roses. The early commentary from some companies is that April is slowing, but most are passing it off as not a big deal. The charts below show the weekly and monthly sales trends for QSR and Casual Dining segments. Both show a continued deceleration post the easter shift. While we are missing the last week of April, the industry traffic is tracking to levels below 4Q22.
FDA Requests Online Grocery Shopping Information
The U.S. Food and Drug Administration (FDA) is seeking information on the online grocery shopping experience, focusing primarily on what consumers see when they order a product. The agency is focused on the nutrition, ingredient, and major food allergens labeling shown to consumers on grocery stores, manufacturers, and third-party websites that offer food on an e-commerce platform. FDA will accept feedback until July 24, 2023. "We are aware that many grocery retailers, manufacturers, and third-party online grocery providers present some label information online, such as nutrition and ingredient information," the announcement states. "However, there may be inconsistencies in how and where this information is displayed between the different online platforms (e.g., website, mobile application, etc.) and online grocery businesses.
For example, the Nutrition Facts label and ingredient information may not be consistently available for the same food packaged and sold through the different online grocery providers. In some cases, there may be differences between the label on the food package and the information being made available online. This may include inconsistent nutrient values and differences in the nutrition information presented online format compared to the nutrition information declared on the package label."
Surge Pricing
I can understand the benefits of this strategy, but I hate when Uber exploits me at busy times. This is a bad idea for Restaurants
The Restaurant Business is running an article on a surge pricing strategy. Like Uber and others, it is a method in which companies charge significantly higher rates during peak demand. The article suggests it is gaining more and more favor in quick-service restaurants and meal delivery services (not needing higher prices). The apparent benefits to restaurants would be improving profitability at peak times. In restaurant lingo, meal time is referred to as "day-parts," and we generally eat breakfast, lunch, and dinner at the same time. I can only view this strategy as exploitative of the consumer. The ability of restaurants to better control customer demand during times of high demand is one of the primary benefits of surge pricing. Restaurants can encourage customers to come during less crowded periods of the day by charging higher prices during these hours. This helps spread demand throughout the day, reducing congestion and increasing table turns. This can help businesses improve their productivity and reduce customers' wait time, leading to increased customer satisfaction and loyalty. In addition, restaurants may boost their revenue with surge pricing by extracting a greater value from their patrons in times of high demand. For instance, if a restaurant is experiencing strong demand during lunchtime, it may be able to charge higher prices for the same products on the menu to produce more money than it would during times when it is less busy. This can assist restaurants in covering their fixed expenditures, such as rent and labor, and invest in ways to improve the quality of their food and service.
Nevertheless, there are also several disadvantages associated with surge pricing. It is possible to have the impression that it is unjust and exploitative. During times of high demand, customers might feel that they are being taken advantage of and resentful about having to pay more for the same food and service. This can result in customers leaving unfavorable reviews and losing their loyalty to a brand. In addition, surge pricing can result in an inefficient distribution of available resources. It's possible that a restaurant won't be able to fill all available seats during its busiest times since high prices discourage customers from going there during certain times, working against the value proposition of surge pricing. In addition, surge pricing might create a two-tiered pricing system where only consumers with more financial resources can afford to dine at popular restaurants during high demand.
