Unit Level Dashboard
Higher Income Provides Top-Line Tailwind
Disposable personal income increased +7.9% y/y in January, helped by: 1) low unemployment; 2) an +8.7% increase in social security benefits; and 3) lower gas prices.
4Q:22 Store Level Margins Improve Sequentially & Y/Y
Based on results for 15 publicly traded $1B+ restaurant companies, 4Q:22 store level operating margins improved on both a sequential & y/y basis.
2023 Operating Costs Moderating But Still Above Average
According to the USDA, food prices are expected to grow more slowly in 2023 than in 2022, but still at above historical average rates. 2023 outlook is as follows: +7.9% for all food prices; +8.6% for food-at-home prices; and +8.3% for food-away-from-home prices.
The vast majority of the $1B+ public restaurant companies are expecting mid to high single digit commodity and mid single wage inflation that should moderate as the year progresses. While this represents an improvement relative to 2022, it is still a significant headwind for store level margins.