Restaurant Research’s Unit Economic Dashboard for April 2024

Apr 15, 2024 | Dashboard, Restaurant Research

2023 Store-Level Margins Benefited from Lower Commodity Costs & Higher Menu Prices

  • The average company owned unit-level margin for the $1B+ public chains improved +0.4% y/y to 17.2% during 4Q23 (+1.7% to 17.6% in FY23), primarily reflecting lower food costs and higher menu prices.
  • Higher menu prices are reflected by a +7% y/y QSR CPI increase during 2023 and a +6% increase for FSR which slightly exceeded the +5% increase in Food at Home.

Sales & Op. Margin Graph

Performance of Public Co. Owned Stores Margins Chart

2024 Commodity Outlook

  • Operators enjoyed a sharp moderation of commodity inflation, and deflation in some instances, during 2023.
  • 2024 commodity inflation prospects are likely to regain historic norms (low-single-digit y/y increases) although Darden expects low to mid-single digit inflation from March through May 2024, pressuring 2024 unit-level margins.
  • In any case, we expect operators to take less menu price increases this year as value takes center stage (especially for lower-income consumers).

Key Commodity Cost Trends Chart

Commodities Outlook 4Q23

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