This Week in Summary 10/28/2022

Oct 31, 2022 | Bubble Monitor, No Bull Economics

Bubble Monitor Chart
Bubble Monitor Chart

It all started last week with Bank of America telling us that everything was great with the consumer. So good in fact, that consumers are borrowing more money, including +12% consumer credit card growth! Of course, we were skeptical because government economic data is telling a different story. But then, the restaurants started to report encouraging 3Q22 results, starting with Domino’s which had been sucking wind but now is able to point to sequential growth over the last couple of quarters. In turn, Starbucks’ report of +9% same-store-sales growth gave us reason to celebrate by running out to buy a hot latte (old school since 75% of its sales are now driven by cold beverages). But surely Starbucks is an anomaly since all its affluent customers are trading down from the purchases of expensive luxuries (like cars & houses) to affordable indulgences like nitro cold brews that also serve as a legal form of speed. But then an innocuous casual chain, BJ Restaurants, weighs in with a +8% comp increase for the quarter with management reporting its belief that the increasing trend of workers returning to the office will continue, driving more lunch business as well as in-person meetings which will provide a tailwind for catering. Say what?? Certainly, they are predicting a tailwind to bread lines? Ok, and then Wingstop completely wows the markets with a +36% 3-year comp during the quarter driven by a customer base that includes many from the lower-income demo. What do we conclude? Not exactly sure, but maybe lower gas prices (down -23% from June) have something to do with all the exciting news? The question is: how to keep this trend moving in the right direction without draining the nation’s strategic oil reserve? This question may become increasingly relevant, especially if we don’t get a break on interest rates real soon.     

Publications 

Is it Time For Capital Markets to Evolve?

How to React to Federal Defecit Improvement?

BJ Restaurants Profits From Workers Returning to the Office

Starbucks a Diamond in the Rough

Will Netflix’s New Low Cost Plan Save Them?

Follow us on LinkedInTwitterFacebook, and YouTube!

Disclaimer of Liability
No Bull Economics
Restaurant Research

Email Sign-up

Jack in the Box Corporate Insights

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.

How to Circumvent Food Shortages?

The vulnerabilities of a long-distance supply chain have become very evident over the last couple of years, especially when it comes to farming.

This Week in Summary 11/18/2022

We want to spotlight Target this week which provides valuable insight on consumer spending.

How Would You Value the Federal Reserve?

Here is an idea: let’s take the Federal Reserve public in the world’s largest IPO.

How to Pass Along Inflationary Costs Without Losing Traffic?

Wendy’s is avoiding standardized menu price increases and turning to strategic increases designed not to price out lower income consumers.

Investors in Retail Stocks Think Consumers are Back

Recent retail stock gains would suggest that investors are confident in consumer strength, despite continuing inflationary issues.

Papa John’s & Chili’s Reveal the Plight of Cash Strapped Consumers

The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?

This Week in Summary 11/11/2022

Market melt up & the midterm elections

DoorDash’s Grip on Labor Costs is Funding New Investments

Doordash’s platform generated +10% of all restaurant industry sales.

3Q Results for Bloomin’, Texas Roadhouse & Cheesecake

Full serve restaurant sales performance is currently a function of customer demographics.

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company