That being said, gas prices have been declining and are now down nearly 60% from the peak levels experienced in July, down 40% YOY and have moved below 2005 levels. Although gas prices account for only one factor among many (unemployment, declining house prices, etc.) that have impacted restaurant demand, at some point, these lower gas prices will help to stabilize and reverse traffic trends just as they played a major role in pulling down demand on their upward climb. In fact, SixthManResearch.com estimates that every $0.01 change in the retail price of gas impacts annual consumer spending by $1.5 billion. Based on the current U.S. average retail price of regular gas of $1.70 per gallon and the 2007 average price of $2.81 per gallon, this equates to a $1.11 change or an additional $166.5 billion of annualized consumer spending injected into the economy (or about 1% of consumer spending in 2009), not an insignificant amount.
The charts below highlight the inverse relationship between retail gas prices and casual dining same-store sales growth and traffic trends. If gas prices continue to fall, restaurant operators should begin to see some relief from a demand perspective.