Internal research shows a 2022 high-single-digit decline in industry delivery sales reflects pressure from the high cost of fees & tips, prompting more people to eat at home.
Somehow Yum China expects low single-digit commodity price inflation during 1H23. Wow! If only the U.S. could figure out how to do that…
KB Home’s 4Q22 results exemplify the impact of depressed consumer confidence levels as evidenced by a sharp pull-back of potential new home orders from first-time buyers that largely have the financial means to complete the transactions (even with elevated mortgage rates). While KB is working hard not to discount its inventory to drive 1Q23 sales, this pullback certainly will have mid-term implications if confidence levels don’t begin to rebound soon.
Management reported: a spending shift from durable household goods to leisure services, benefitting the restaurant industry; the high-end consumer is doing well & while <$50k consumers have been a little soft over the last 6 months, Darden’s mix from this demo is still above pre-covid levels; and as the <$50,000 demo includes singles & retirees living in multigenerational households, lower-income consumers are in better shape than they appear.
Yum! highlighted during a recent analyst day presentation how its strategy to acquire proprietary tech companies provides a key advantage relative to competitors who must rely on commoditized solutions from third parties.
Digital orders save labor by eliminating the need for employees to take orders & payments. YUM! believes it is possible to eventually drive a 100% digital order mix, up from 40% currently.
Jack in the Box results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night.
Wendy’s is avoiding standardized menu price increases and turning to strategic increases designed not to price out lower income consumers.
The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?
Doordash’s platform generated +10% of all restaurant industry sales.
Email Sign-up
A Restaurant Research LLC Company