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Alicia Kelso

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Restaurant menu prices decelerate, but continue to outpace grocery prices

🍴 In July, food index rose by 0.2%, matching June. Food-at-home index up by 0.1%, food-away-from-home by 0.2%. Over 12 months, grocery prices increased by 1.1%, restaurant prices by 4.1%, surpassing the 21-year average of 3.3%. This period marks the 17th consecutive month of restaurants outpacing grocery prices. The Consumer Price Index also rose by 0.2%, bringing the inflation index below 3% (at 2.9%), the first since March 2021. Full-year 2024 restaurant industry same-store sales growth projected to be the lowest since 2016, excluding 2020.
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Texas is added to Michelin’s list of review guides

🍴 The Texas Restaurant Association Show ended on a Monday in San Antonio, followed by the announcement of Texas receiving its own Michelin Guide covering Dallas, Fort Worth, San Antonio, Austin, and Houston. Texas becomes the 11th North American location with a Michelin Guide, joining others such as California, New York City, and Washington, D.C. A 2019 Ernst & Young study revealed that 42% of consumers use the guide internationally, and 61% domestically for dining decisions. Michelin has rated restaurants in over 40 countries since its first guide in 1900. The Texas guide will evaluate restaurants on quality, flavor harmony, cooking techniques, chef's personality, and consistency.
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Menu inflation at full-service restaurants outpaced QSRs in June

📈 The Consumer Price Index dropped 0.1% in June, first decline since 2020, with an annual increase of 3%, nearing the Fed’s 2% target. Food index rose 0.2% in June; food-at-home up 0.1%, food-away-from-home climbed 0.4%. Over 12 months, food-at-home prices increased 1.1%, while restaurant prices jumped 4.1%. Full-service restaurant menu prices rose 0.6% versus limited-service at 0.2% in June. Kalinowski Equity Research predicts full-year 2024 same-store sales growth to be significantly lower than 2023.
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Q2 proves to be tough for the restaurant job market

📈 In June, the U.S. economy added 206,000 jobs, with unemployment at 4.1%, up from 4% in May. Leisure and hospitality saw only 7,000 new jobs, compared to May's 42,000. The restaurant industry's second quarter had the weakest job growth since Q4 2020, adding only 900 jobs. Despite a forecast of 525,000 seasonal jobs, full-service restaurants are still -4% below pre-pandemic levels. Job openings in restaurants and accommodations are below 800,000, signaling a potential market normalization.
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