The Bureau of Labor Statistics released CPI data for the month of September this morning. The spread between CPI for Food at Home versus Food Away from Home continues to grow. Inflation in the restaurant check is far-outstripping inflation in the grocery aisle.
The advantage that restaurants enjoyed over grocers in 2011, in terms of lower price increases year-over-year, has reversed. Restaurants’ pricing power is much-diminished. As CPI for Food at Home decelerated to 0.8% in September, CPI for Food Away from Home continues to grow at 2.8%.
Casual Dining
As we wrote in our recent post, “RELATIVE VALUE MATTERS FOR CASUAL DINING”, our research indicates that the Restaurant Value Spread, or difference between CPI FAH and CPI FAFH, is highlighting downside risk for casual dining same-restaurant sales expectations.
Howard Penney
Managing Director
Rory Green
Analyst
