Alicia Kelso

💸 Inflation rose 0.5% in January, annual rate at 3%. Costs driven by shelter, energy, gasoline, food. Overall food index up 0.4%, food at home +0.5%, away +0.2%. Year-over-year, food prices increased: overall +2.5%, at home +1.9%, away +3.4%. Egg prices surged 15.2%, the largest monthly jump since June 2015. The gap between grocery and restaurant price increases was the narrowest since April 2023, yet grocery stores maintained a 150-basis-point advantage over the historical average of 70-basis-points, impacting restaurant sales in 2024. Menu pricing increased 3.4% year-over-year, equalling the 23-year average. Companies like McDonald’s and Brinker observed easing inflation, with Brinker's food and beverage costs improving by 20 basis points year-over-year.

🍴 According to the ICR Conference, the restaurant industry saw sequential improvements in traffic and sales towards the end of 2024, with a 0.3% month-over-month decline in December but a 2.4% increase compared to December 2023. Traffic rose by 0.8% in Q4 2024, in contrast to a 1.1% decrease in Q4 2023. Analysts anticipate a "stable to improved environment" with consumer spending expected to advance in 2025, while credit card and auto loan delinquencies slowed down, implying a potential peak in consumer debt. Restaurant spending is predicted to grow by a low-single-digit percentage, but traffic could be flat or slightly negative due to ongoing inflation and a cooler labor market.

🍴 In the Stephens Annual Investment Conference in November, One Restaurant Group CEO Emanual "Manny" Hilario observed Thursdays to Saturdays becoming "dead days" for dining, with a shift to earlier in the week. San Francisco restaurants noted similar trends. During BJ’s Restaurants Q3 earnings call in late October, a rise in weekday traffic was reported. Placer.ai data showed an 11.3% increase in foot traffic at Dave & Buster’s on Thursdays in Q3 compared to the previous year. Promotions like BJ’s Pizookie Meal Deal and Dave & Buster’s Wednesday discounts are being used to boost midweek visits. OpenTable data revealed an 11% increase in Wednesday dining year-over-year, with 43% of Americans planning to dine out then. Toast's Restaurant Trends Report indicated an uptick in Monday to Wednesday reservations, with Monday (+11%), Tuesday (+11%), and Wednesday (+8%) in Q3 2024 compared to Q3 2023. However, Saturday remains the busiest day at 27%. Placer.ai also found a shift towards non-traditional dining days since 2019, with Monday visits growing from 10.2% to 10.7% in 2024, Friday visits declining from 17.6% to 17.1%, and Wednesday visits increasing from 11.1% to 11.4%. Furthermore, OpenTable data showed a 10% increase in solo

📈 The Consumer Price Index rose 0.3% in November, now 2.7% higher than November 2023. Menu prices increased by 3.6% compared to last year, with limited-service meals up 3.7% and full-service meals at 3.6%. Grocery/supermarket inflation grew 1.6% year-over-year, marking the 20th consecutive month it lagged behind restaurant price increases. Egg prices surged over 40% month-over-month due to avian flu. Overall food prices jumped 9.9% since 2022, the fastest annual increase since 1979.