Restaurants have gotten so expensive……also recycling and phone apps (1 Viewer)

[Doug B]

I might not share if I order the tuna at a steak house, but I'm not a moron, so I would never order tuna in a steakhouse.

Aside: There's exceptions to everything -- up until ~2010 or so, there used to be a barebones steak place around here that was well-known for their tuna steak. It was not fine dining, though ... great food, but was not competing with white-tablecloth places for business.

 

[Doug B]

if i recall:

Spring rolls: about $15

It was a Vietnamese place and what you're calling "spring rolls" was something like this? And if so, was it two or three to an order?

Around here, Chinese restaurants have "spring rolls", too, but they are an entirely different thing (mini egg rolls, with meat-free cabbage filling). So when people talk about "spring rolls", it helps to specifiy.

 

[General Malaise]

i ate at a sushi place in south beach last fall and you ordered everything on your phone. you start an order with your credit card when you 1st sit down and you keep picking things throughout your stay. you essentially just have bus boys that clear plates and bring out the stuff you order. and they don't allow tipping. it was like a dream.

There's a Burmese joint near us that has robots doing the serving. This is going to be a part of the future in the restaurant industry.

 

[Dan Lambskin]

To be fair Panera bagels are ok, but their sandwiches…I can find better stuff in the frozen food aisle

I will fight you about this. Worst. Bagels. Ever.

Not a hill I’m gonna die on. I’ll eat them if someone brought them in but don’t typically seek them out

 

[Doug B]

Never been in a Panera. There's one near my parents, and whenever I drive by, I think I need to stop in on the recommendation of my brohan from another mohan, but I don't know what goes in there. "Bread" is a bit vague.

I'd like to talk to someone knowledgeable about Panera's franchising. They seem to vary a lot in quality from location to location. Some of that can come down to on-site management and employee volition. But I also have a feeling that while the Panera model allows for kick-butt food to be put out ... it's probably tempting for a franchisee to cut corners off of what is probably a somewhat pricey model to run perfectly.

Hope that makes sense. TL;DR: Probably cheaper to run a Subway than a Panera, and thus more tempting to cheap out when running a Panera.

 

[Dr. Octopus]

I used to go out to lunch every day at work for a long time - once a sandwich, chips and drink eclipsed $10 I started bringing from home. I forgot the other day for the 1st time in a while and was shocked to see sandwich, chips and drink for $17. Thats over $350 per month for sandwich lunches - I know Im sounding old but thats crazy!

In my work cafeteria yesterday, I got a grilled chicken wrap, chips and a drink for $16.47, yes that’s just not an efficient use of money.

 

[culdeus]

I used to go out to lunch every day at work for a long time - once a sandwich, chips and drink eclipsed $10 I started bringing from home. I forgot the other day for the 1st time in a while and was shocked to see sandwich, chips and drink for $17. Thats over $350 per month for sandwich lunches - I know Im sounding old but thats crazy!

In my work cafeteria yesterday, I got a grilled chicken wrap, chips and a drink for $16.47, yes that’s just not an efficient use of money.

They have some robot food chicken wrap machine at my office that dispenses wraps out at barely above freezing at the size of the of a 12oz coke can for $9.45. At least don't have to tip a robot.

 

[FreeBaGeL]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

 

[Dr. Octopus]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

...or if you actually go to restaurants. Admittedly, I live in a vacation type area, but the restaurants/bars are jam packed.

 

[SoBeDad]

Never been in a Panera. There's one near my parents, and whenever I drive by, I think I need to stop in on the recommendation of my brohan from another mohan, but I don't know what goes in there. "Bread" is a bit vague.

They used to have some good soup, including a daily vegan one for my daughter and me. The sandwich and soup specials were pretty good. For indulgence, the bear claw pastry was great.

Quality of staff and cleanliness varies widely for places like Panera. Staffing is an issue. I walked by a Haagen Dazs last night in Miami Beach - on a hot night, there was a long line and only 1 employee.

 

[FreeBaGeL]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

...or if you actually go to restaurants. Admittedly, I live in a vacation type area, but the restaurants/bars are jam packed.

Yeah, agreed. I don't even live in a vacation type area and they're all packed here too. Midsize town Utah. 5 years ago you could walk in on Friday night and be seated immediately. Now you go on Tuesday night and there's a 45+ minute wait. It's crazy.

Though it's still Utah, so if you go at 8:30 or later you can be pretty sure you'll get seated right away, lol.

 

[Doug B]

In my work cafeteria yesterday, I got a grilled chicken wrap, chips and a drink for $16.47, yes that’s just not an efficient use of money.

I guess it depends on where you work ... but didn't workplace cafeterias use to be known as being pretty darned cheap?

I once worked at a national telecom's HQ, and is used to get like a $1.50 breakfast their office cafeteria (bowl of grits + about a cup of scrambled eggs placed on top). And that was this century, not back in the 80s or anything.

 

[Doug B]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

Looking from a top-of-the-mountain view ... it looks like the overall industry can make money even if some portion of society has been recently priced out. Doesn't mean that certain classes of restaurant aren't struggling.

 

[FreeBaGeL]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

Looking from a top-of-the-mountain view ... it looks like the overall industry can make money even if some portion of society has been recently priced out. Doesn't mean that certain classes of restaurant aren't struggling.

Well the post was basically saying more people have chosen to stay home instead of eat out, implying that restaurant visitorship is way down or something. I don't have the data, but based on basically everyone in the world's anecdotes, I would wager that restaurant visitorship is at an all-time high and WAY higher than it was pre-covid.

 

[NutterButter]

i ate at a sushi place in south beach last fall and you ordered everything on your phone. you start an order with your credit card when you 1st sit down and you keep picking things throughout your stay. you essentially just have bus boys that clear plates and bring out the stuff you order. and they don't allow tipping. it was like a dream.

There's a Burmese joint near us that has robots doing the serving. This is going to be a part of the future in the restaurant industry.

Possibly. Those runner/bus boys are pretty cheap and there's almost no training. Just need the immigrants if we can't find those folks in our current labor force. No matter to me. The two features of that sushi place were the real difference to me. How it gets to me is irrelevant.

 

[Drunken knight]

if i recall:

Spring rolls: about $15

It was a Vietnamese place and what you're calling "spring rolls" was something like this? And if so, was it two or three to an order?

Around here, Chinese restaurants have "spring rolls", too, but they are an entirely different thing (mini egg rolls, with meat-free cabbage filling). So when people talk about "spring rolls", it helps to specifiy.

exactly

 

[fruity pebbles]

Never been in a Panera. There's one near my parents, and whenever I drive by, I think I need to stop in on the recommendation of my brohan from another mohan, but I don't know what goes in there. "Bread" is a bit vague.

They used to have some good soup, including a daily vegan one for my daughter and me. The sandwich and soup specials were pretty good. For indulgence, the bear claw pastry was great.

Quality of staff and cleanliness varies widely for places like Panera. Staffing is an issue. I walked by a Haagen Dazs last night in Miami Beach - on a hot night, there was a long line and only 1 employee.

Soon to be zero employees if the person has to put up with that night after night

 

[Capella]

To be fair Panera bagels are ok, but their sandwiches…I can find better stuff in the frozen food aisle

I will fight you about this. Worst. Bagels. Ever.

Not a hill I’m gonna die on. I’ll eat them if someone brought them in but don’t typically seek them out

It’s not a NY or DC bagel for sure but their cinnamon crunch one is fine if you want diabetes. It’s mainly all sugar which is great at 8 am as we all know.

 

[fruity pebbles]

In my work cafeteria yesterday, I got a grilled chicken wrap, chips and a drink for $16.47, yes that’s just not an efficient use of money.

I guess it depends on where you work ... but didn't workplace cafeterias use to be known as being pretty darned cheap?

I once worked at a national telecom's HQ, and is used to get like a $1.50 breakfast their office cafeteria (bowl of grits + about a cup of scrambled eggs placed on top). And that was this century, not back in the 80s or anything.

Food at the hospital has nearly doubled. Used to be cheap. Around $4 for a value meal which is typically something like a slice of turkey, mashed potato, a vegetable and a fountain drink. That same meal is now $7. We aren’t talking chef prepared here either. This is straight out of the package, no seasoning, prison food.

 

[Doug B]

Well the post was basically saying more people have chosen to stay home instead of eat out, implying that restaurant visitorship is way down or something. I don't have the data, but based on basically everyone in the world's anecdotes, I would wager that restaurant visitorship is at an all-time high and WAY higher than it was pre-covid.

This won't address your point directly. And it might not make a lot of sense in words (versus bar charts) and it's speculation, but I'll take a stab at it.

Let's say for the same of making a point that when you aggregate data from all Americans who visited restaurants regularly** in 2019 and averaged out their annual household income ... it might look something like this:

2019
25th percentile -- $35k
50th (average) -- $55k
75 percentile -- $80k

Do the same for 2023, and it might be:

2023
25th percentile -- $50k
50th (average) -- $65k
75 percentile -- $95k

As that 25th percentile figure rises ... certain restaurants catering to that level feel the squeeze. Many (most?) other restaurants don't.

I don't want to speak for @Leroy Hoard , but I would bet he was talking about a specific level of restaurant, a certain type of restaurant catering to certain clientele. Versus speaking about the industry at large. I'm sure French Laundry and Spago are doing fine.

 

[Doug B]

if i recall:

Spring rolls: about $15

It was a Vietnamese place and what you're calling "spring rolls" was something like this? And if so, was it two or three to an order?

Around here, Chinese restaurants have "spring rolls", too, but they are an entirely different thing (mini egg rolls, with meat-free cabbage filling). So when people talk about "spring rolls", it helps to specifiy.

exactly

Around here, an order of Vietnamese spring rolls is invariably two to an order, usually in the $6-8 range (more like $4-5 as recently as ~2015 in some places). This place recently raised them up to $9, but that's one of the most expensive Vietnamese places locally.

$15 for two rolls seems very steep. It is what it is, though.

 

[Drunken knight]

if i recall:

Spring rolls: about $15

It was a Vietnamese place and what you're calling "spring rolls" was something like this? And if so, was it two or three to an order?

Around here, Chinese restaurants have "spring rolls", too, but they are an entirely different thing (mini egg rolls, with meat-free cabbage filling). So when people talk about "spring rolls", it helps to specifiy.

exactly

Around here, an order of Vietnamese spring rolls in invariably two to an order, usually in the $6-8 range (more like $4-5 as recently as ~2015 in some places). This place recently raised them up to $9, but that's one of the most expensive Vietnamese place locally.

$15 for two rolls seems very steep. It is what it is, though.

I am in Sonoma county...not unusual

 

[FreeBaGeL]

Well the post was basically saying more people have chosen to stay home instead of eat out, implying that restaurant visitorship is way down or something. I don't have the data, but based on basically everyone in the world's anecdotes, I would wager that restaurant visitorship is at an all-time high and WAY higher than it was pre-covid.

This won't address your point directly. And it might not make a lot of sense in words (versus bar charts) and it's speculation, but I'll take a stab at it.

Let's say for the same of making a point that when you aggregate data from all Americans who visited restaurants regularly** in 2019 and averaged out their annual household income ... it might look something like this:

2019
25th percentile -- $35k
50th (average) -- $55k
75 percentile -- $80k

Do the same for 2023, and it might be:

2023
25th percentile -- $50k
50th (average) -- $65k
75 percentile -- $95k

As that 25th percentile figure rises ... certain restaurants catering to that level feel the squeeze. Many (most?) other restaurants don't.

I don't want to speak for @Leroy Hoard , but I would bet he was talking about a specific level of restaurant, a certain type of restaurant catering to certain clientele. Versus speaking about the industry at large. I'm sure French Laundry and Spago are doing fine.

I can definitely buy that as a possibility, but I don't see what class of restaurant that would be. It's not French Laundry and Spago's stocks that are up. It's Applebees and Outback and Olive Garden and Mcdonald's and everything in between and above and below. Chinese restaurants are twice as full despite prices being twice as high. Fancy local Italian restaurants with pretentious names are the same.

Regardless, the original comment didn't seem directed at any particular, nor can I find a class of restaurant it would likely apply to right now even if it was. Was just kind of a random comment that I suppose COULD be true (I don't have any actual data here) but seems to be the exact opposite of what everyone is seeing in person. As if somehow demand is down when one of the biggest problems the restaurant industry seems to be having right now is getting enough staff to keep up with the overwhelming increase in demand.

 

[Mitchie]

not sure about the self service, employees are pretty cheap since a lot of their wage is tips. when people go out to eat at higher end restaurants i think they want personal interaction (i.e. cute chicks)

Self service is already happening. Food halls are already all over my city.
Across street from my building

Picture free WiFi, big tables, and 5 or 6 small kitchens with a few people handling the food running. Restaurants can have a kitchen staff, no management, and cut out all middle management, hosts, servers, etc.

QR code on the table, sends you to the app, you can get sushi for yourself from one place, and a hot dog for your kid from another place. If you are a low maintenance diner, which I definitely am, it's great. Also: no table turning. You want to sit for hours with laptop, and drink coffee, no one cares.

no doubt there will be a market for that, i was referring more to fine dining

 

[Keerock]

Never been in a Panera. There's one near my parents, and whenever I drive by, I think I need to stop in on the recommendation of my brohan from another mohan, but I don't know what goes in there. "Bread" is a bit vague.

They used to have some good soup, including a daily vegan one for my daughter and me. The sandwich and soup specials were pretty good. For indulgence, the bear claw pastry was great.

Quality of staff and cleanliness varies widely for places like Panera. Staffing is an issue. I walked by a Haagen Dazs last night in Miami Beach - on a hot night, there was a long line and only 1 employee.

Their chicken rice soup used to be so damn good.. then they started cheaping out on ingredients. Luckily my wife found a great copy-cat recipe so we still enjoy it regularly.

 

[Keerock]

To be fair Panera bagels are ok, but their sandwiches…I can find better stuff in the frozen food aisle

I will fight you about this. Worst. Bagels. Ever.

Not a hill I’m gonna die on. I’ll eat them if someone brought them in but don’t typically seek them out

It’s not a NY or DC bagel for sure but their cinnamon crunch one is fine if you want diabetes. It’s mainly all sugar which is great at 8 am as we all know.

I'll agree with you because the cinnamon crunch is a bagel in name only. It's more like a coffee cake.

 

[Ron Swanson]

i ate at a sushi place in south beach last fall and you ordered everything on your phone. you start an order with your credit card when you 1st sit down and you keep picking things throughout your stay. you essentially just have bus boys that clear plates and bring out the stuff you order. and they don't allow tipping. it was like a dream.

There's a Burmese joint near us that has robots doing the serving. This is going to be a part of the future in the restaurant industry.

I'm not sure why this intrigues me so much but here we are. Please, tell us more about this Burmese robot restaurant.

 

[massraider]

I'm not sure why this intrigues me so much but here we are. Please, tell us more about this Burmese robot restaurant.

I don't appreciate these fancy Southeast Asian elites shoving their wealth in my face.

 

[Raging weasel]

In my work cafeteria yesterday, I got a grilled chicken wrap, chips and a drink for $16.47, yes that’s just not an efficient use of money.

I guess it depends on where you work ... but didn't workplace cafeterias use to be known as being pretty darned cheap?

I once worked at a national telecom's HQ, and is used to get like a $1.50 breakfast their office cafeteria (bowl of grits + about a cup of scrambled eggs placed on top). And that was this century, not back in the 80s or anything.

Food at the hospital has nearly doubled. Used to be cheap. Around $4 for a value meal which is typically something like a slice of turkey, mashed potato, a vegetable and a fountain drink. That same meal is now $7. We aren’t talking chef prepared here either. This is straight out of the package, no seasoning, prison food.

If you were a patient that same meal would cost your insurance company $20

 

[Doug B]

Regardless, the original comment didn't seem directed at any particular, nor can I find a class of restaurant it would likely apply to right now even if it was. Was just kind of a random comment that I suppose COULD be true (I don't have any actual data here) but seems to be the exact opposite of what everyone is seeing in person. As if somehow demand is down when one of the biggest problems the restaurant industry seems to be having right now is getting enough staff to keep up with the overwhelming increase in demand.

[ Just a note: Enjoying the discussion and learning a lot, from you and from others (fistbump to @dkp993 as well) ]

After reading your post, and noting that you and I didn't really have hard data -- and noting that I didn't yet feel like trawling for hard data -- I started a little Google exercise. I was going to first Google "fewer people going to restaurants" and then Google "more people going to restaurants" and then just see what kind of stuff cropped up.

By no means is this a "well, that settles it!" article -- just thought it was interesting among the top few "fewer people" Google pulls. It's making the points I've been stabbing at on this page -- but FWIW it's from November 2022 and the time period it covers is something like late summer 2022 to press date:

Restaurant sales are going up. But dining out is on the decline​

New York (CNN Business) — Chain restaurants have been reporting growing sales in the third quarter. But more sales don’t mean more customers.​

​

In fact, industry watchers are noticing that foot traffic to restaurants has been falling in recent months. That’s because as inflation eats into consumers’ budgets, many have been cutting back on their restaurant visits and eating at home more often.​

​

“You’re seeing that dichotomy where you see solid sales numbers, but at the end of the day it’s mostly … because of price increases,” said RJ Hottovy, head of analytical research at Placer.ai, which uses location data from mobile devices to estimate visits.​

​

Still digging around for more stuff. That was just something quick.

 

[Doug B]

These are are both from March 2023, with the data I think up to January 2023 (titles are links to MorningConsult.com articles):

How Consumers Are Changing Their Restaurant Habits as Inflation Continues​

KEY TAKEAWAYS​

• In January, 55% of U.S. adults said they made changes to the way they eat and drink as a result of inflation — and 83% of those respondents said they were eating out at restaurants less often.
• Dining-out frequency has not returned to pre-pandemic levels, and consumers aren’t swapping those on-premises occasions for takeout and delivery orders; they’re simply staying home.
• With fewer opportunities to earn consumers’ dining-out dollars, it’s more important than ever for restaurants to deliver differentiated experiences and look to loyalty programs to win repeat visits.

The State of Food & Beverage Report: H1 2023​

KEY TAKEAWAYS​

• Double-digit food inflation puts a spotlight on the category and pressures choices, from where to shop to what to eat and drink.
• Savings dominate grocery shoppers’ decisions, leading them to trade down, cut back or eliminate purchases entirely.
• Restaurants are on the chopping block. As consumers look to save, restaurants are the first to go.
• Alcohol moderation trends are becoming a lifestyle. Cost and health concerns are cementing this behavior.

Want to keep looking, maybe check some very recent stuff out (June/July 2023).

 

[General Malaise]

i ate at a sushi place in south beach last fall and you ordered everything on your phone. you start an order with your credit card when you 1st sit down and you keep picking things throughout your stay. you essentially just have bus boys that clear plates and bring out the stuff you order. and they don't allow tipping. it was like a dream.

There's a Burmese joint near us that has robots doing the serving. This is going to be a part of the future in the restaurant industry.

I'm not sure why this intrigues me so much but here we are. Please, tell us more about this Burmese robot restaurant.

Top Burmese. Burmese Cuisine At Your Fingertips. Burmese Restaurant.

Top Burmese. Portland's Best Restaurant serving authentic Burmese Cuisine. Best Burmese Food in Portland Oregon. Restaurant of the year. Myanmar Cuisine. Top Burmese Hospitality Group. Burmese Hotel. Exotic Salads and Signature Curries, Samosas, Tea Leaf Salad. Virtual Restaurants in Portland...

topburmese.com

R2D2 at your service!

 

[Doug B]

Flip side: This is from April 2023 (marketplace.org):

Rising restaurant prices aren’t stopping Americans from “revenge dining”​

Americans are going out to eat a lot. Spending at restaurants and bars was up 13% in March compared to a year ago, according to the Census Department. That’s even as prices for meals outside the home kept rising — and groceries got cheaper.

Call it … revenge dining.

“There’s a real pent-up demand to get back out into the world again and eat out,” said James Cook, director of retail research at commercial real estate company JLL, which just put out a report on the restaurant industry (I'd like to locate this report - db). He says demand is especially high for takeout and fast food. But reservations for sit down dining are growing too, mostly in the sunbelt states, “like Florida, Texas, Arizona,” said Cook.

 

[General Malaise]

I'm not sure why this intrigues me so much but here we are. Please, tell us more about this Burmese robot restaurant.

I don't appreciate these fancy Southeast Asian elites shoving their wealth in my face.

With a GAY robot to boot!

 

[massraider]

Aside: There's exceptions to everything -- up until ~2010 or so, there used to be a barebones steak place around here that was well-known for their tuna steak. It was not fine dining, though ... great food, but was not competing with white-tablecloth places for business.

I was kinda joking around about that, but it's sort of true for me, because if I eat out anywhere NOT a steakhouse, I don't order steak.

Absolutely nothing wrong with doing it, but my steak snobbery is pretty high up there. I'm not ordering a discount hanger flank should be a burrito meal cuz the word 'steak' is in the title. I'm not looking for bargains on my steak.

 

[Doug B]

An angle I hadn't considered -- maybe increased take-out can help buoy restaurant revenue even as fewer people "go out to eat". From NewsNation (also paywalled at WSJ.com), late April 2023:

(NewsNation) — Fewer people are dining out in the post-pandemic era, and some restaurants are starting to adapt, according to The Wall Street Journal.​

​

The Journal reports that 18% of sales at fine-dining restaurants were to people not physically eating at the establishments.​

​

While supply chain issues have eased after the pandemic, prices for many services — including restaurants — are still surging, fueled by greater demand from consumers who in many cases have enjoyed rising wages.​

I'd have assumed fine-dining places didn't deal in much take-out, but maybe these days?

Also ... that third paragraph seems to counter the first two a bit, doesn't it?

 

[massraider]

An angle I hadn't considered -- maybe increased take-out can help buoy restaurant revenue even as fewer people "go out to eat". From NewsNation (also paywalled at WSJ.com), late April 2023:

(NewsNation) — Fewer people are dining out in the post-pandemic era, and some restaurants are starting to adapt, according to The Wall Street Journal.​

​

The Journal reports that 18% of sales at fine-dining restaurants were to people not physically eating at the establishments.​

​

While supply chain issues have eased after the pandemic, prices for many services — including restaurants — are still surging, fueled by greater demand from consumers who in many cases have enjoyed rising wages.​

I'd have assumed fine-dining places didn't deal in much take-out, but maybe these days?

Also ... that third paragraph seems to counter the first two a bit, doesn't it?

From a margin perspective, restaurants are really giving away all the profit to Grubhub. Those services take like a 30% bite.

How many businesses run on 30% profit? Some cartels?

Yeah but!!! What if I call and pick it up??

Not enough people are doing this to matter. Yes, it's the best thing for the business.

 

[Doug B]

From a margin perspective, restaurants are really giving away all the profit to Grubhub. Those services take like a 30% bite.

How many businesses run on 30% profit? Some cartels?

Yeah but!!! What if I call and pick it up??

Not enough people are doing this to matter. Yes, it's the best thing for the business.

Didn't even consider new-school delivery services. Almost all that take-out is app-based services these days?

 

[Stoneworker]

I remember a few years ago the mantra being "if you can't afford eating out, stay home". Looks like more and more are following that advice.

Restaurant stock prices say otherwise.

Is this true?

I just did a quick search. First two that popped up are both down over last two years (May 2021). DINE brands (Applebee's, IHOP) and Bloomin' Brands (Outback). Dine is down about 40% and Outback down 10%.

AdvisorShares pure-play restaurant ETF is down 12% in same timeframe.

All are up a good chunk from fall 2022, but then so is the entire market.

 

[Doug B]

This article is from the Nations's Restaurant News, February of this year:

The great trade down is underway for restaurant consumers​

McDonald’s and Yum Brands both reported strong quarters and traffic gains, while fast casual and casual dining brands are experiencing traffic declines.​

​

... Unemployment is at a historically low level, wages are at historically high levels, but consumers have begun trading down, nonetheless – illustrating they have some simmering anxiety about what is happening or what’s to come. At least, that’s the gist from the first two weeks of public restaurant earnings calls – a solid indicator of consumer confidence given the industry’s ubiquity and discretionary position.​

​

... “We’re still seeing the consumer is resilient and it plays to our strengths as a system in terms of being well positioned on value,” McDonald’s CEO Chris Kempczinski said during the company’s earnings call Jan. 31. “Overall, the consumer is actually holding up better than what we would have probably expected a year ago or six months ago.”​

​

Yum Brands CEO David Gibbs noted his company is seeing “a little” trade down into its brands, which include Taco Bell, KFC, Pizza Hut and The Habit Burger Grill.​

​

... [Gibbs] added that Yum’s brands are “perfectly positioned to deliver” in this type of environment, pointing to Taco Bell’s Cravings Menu, Pizza Hut’s new Melts and KFC’s new two-for-$5 wraps as examples. “We like the environment we’re in,” he said.​

​

Some of Yum’s and McDonald’s trade down consumers may be coming from Chipotle, which reported a “tough” fourth quarter that included a 4% decline in transactions. By comparison, Kempczinski said McDonald’s has experienced “strong traffic growth.”​

​

Consumers are also likely trading down from casual dining. Brinker International reported a traffic decline of 7.6% at its Chili’s concept, for instance, and it’s not unique in its segment. Data from Placer.ai emailed to Nation’s Restaurant News also finds high-single-digit and double-digit traffic declines throughout the past several months at casual dining concepts like Bonefish Grill, Fleming’s Prime Steakhouse and Wine Bar, Outback Steakhouse, Olive Garden and Applebee’s​

​

Perhaps the strongest indicator that consumers are tightening their belts a bit? Chipotle’s delivery orders dropped by 15% last quarter, and we all know by now that delivery is costlier than dine-in or pickup.​

Same source, two months later in April 2023:

As the trade down continues, consumers cut back on restaurant dinners​

New data finds that restaurant traffic is up at QSRs, while full-service dinner traffic has declined by 13%.​

​

... consumers seem to be accelerating their trade down activity that started picking up late last year. Quick-service restaurants enjoyed a 3% traffic uptick, for instance, while visits to full-service concepts dropped by 2% year-over-year. Further, lower check breakfast and morning snack dayparts have fully recovered from pandemic losses, according to Circana. Morning restaurant visits grew by 10% versus last year and are up by 2% versus February 2020. Conversely, lunch visits were slightly down, at negative 1%, while dinner traffic was down by 3% in February.​

​

And, higher-check full-service dinner visits – the segment’s busiest daypart – declined by 13%.​

 

[massraider]

Didn't even consider new-school delivery services. Almost all that take-out is app-based services these days?

I would say most. There is always outlier spots and towns.

The way it started, the push was, yeah, you aren't making money on this customer, but you are now REACHING them, they can find out how wonderful you are, and you can have a new regular. Loss leader.

Which all makes sense, fast forward 10 years, and every deli and pizza place has two different prices. They have Grubhub price, and price when you in the store. Well, maybe not every, but the smart ones do. The number of loss leaders has increased, and now instead of a bunch of new happy guests, we have a bunch of people who vaguely think they are getting ripped off on delivery by the restaurants. When in fact these delivery services are awful for restaurants.

 

[dkp993]

Regardless, the original comment didn't seem directed at any particular, nor can I find a class of restaurant it would likely apply to right now even if it was. Was just kind of a random comment that I suppose COULD be true (I don't have any actual data here) but seems to be the exact opposite of what everyone is seeing in person. As if somehow demand is down when one of the biggest problems the restaurant industry seems to be having right now is getting enough staff to keep up with the overwhelming increase in demand.

[ Just a note: Enjoying the discussion and learning a lot, from you and from others (fistbump to @dkp993 as well) ]

After reading your post, and noting that you and I didn't really have hard data -- and noting that I didn't yet feel like trawling for hard data -- I started a little Google exercise. I was going to first Google "fewer people going to restaurants" and then Google "more people going to restaurants" and then just see what kind of stuff cropped up.

By no means is this a "well, that settles it!" article -- just thought it was interesting among the top few "fewer people" Google pulls. It's making the points I've been stabbing at on this page -- but FWIW it's from November 2022 and the time period it covers is something like late summer 2022 to press date:

Restaurant sales are going up. But dining out is on the decline​

New York (CNN Business) — Chain restaurants have been reporting growing sales in the third quarter. But more sales don’t mean more customers.​

​

In fact, industry watchers are noticing that foot traffic to restaurants has been falling in recent months. That’s because as inflation eats into consumers’ budgets, many have been cutting back on their restaurant visits and eating at home more often.​

​

“You’re seeing that dichotomy where you see solid sales numbers, but at the end of the day it’s mostly … because of price increases,” said RJ Hottovy, head of analytical research at Placer.ai, which uses location data from mobile devices to estimate visits.​

​

Still digging around for more stuff. That was just something quick.

I will add that my experience with this right now, while no longer is directly restaurant related but is still food and beverage service related, running 60 venues in 5 different states. Sales are up (due to pricing increase) and overall covers are down prior to last year (which spiked significantly) and down but close to 2019 levels.

 

[Doug B]

Now, for the "more people eating at restaurnts" Google searches. From Axios, September 2022:

More people are dining out now than before the pandemic​

... but ...

Dining out is back to pre-pandemic levels and then some, according to new data from OpenTable.​

​

Why it matters: While the fight rages on over going back to the office, other areas of our lives have returned to something like normal.​

​

What's happening: The number of people dining in restaurants in the U.S., who reserved on OpenTable in August and September, was higher than in the same months in 2019.​

​

Yikes. That's headline looks a little gamed. Let's see if we can do a little better - and more recent.

 

[Doug B]

By no means is this a "well, that settles it!" article -- just thought it was interesting among the top few "fewer people" Google pulls. It's making the points I've been stabbing at on this page -- but FWIW it's from November 2022 and the time period it covers is something like late summer 2022 to press date:

Restaurant sales are going up. But dining out is on the decline​

New York (CNN Business) — Chain restaurants have been reporting growing sales in the third quarter. But more sales don’t mean more customers.In fact, industry watchers are noticing that foot traffic to restaurants has been falling in recent months. That’s because as inflation eats into consumers’ budgets, many have been cutting back on their restaurant visits and eating at home more often.

Heh. This same article is #3 among all the "more people" searches, as well. Smart headlining, CNN!

EDIT: The Morning Consult articles (see above), as well.

 

[Doug B]

Holey moley -- I'd have lost that bar bet -- from Axios again, March 2023:

Restaurants top groceries: Americans are spending more on eating out​

Americans are spending more money at restaurants than on groceries — and the gap has been widening.​

​

By the numbers: People spent 20.7% more at restaurants than they spent on groceries in 2022 — and that figure rose to 29.5% in the first two months of the year, according to Commerce Department data compiled by JLL.​

• Put another way, consumers spent about $130 on dining out for every $100 they spent on groceries to start the year.

That makes me think, though ... am I off-base to just believe that the top 15-20% of American wage-earners are simply spending THAT much on dining out? Enough to make up for however many millions of Americans are now priced out? Less foot traffic, more revenue?

 

[Doug B]

Searching for "more people eating out" -- both with the regular Google search and the specific Google News search -- has been weirdly unproductive compared to the "fewer people eating out" searches. That could be because "fewer people eat out!" is a sexier story -- bad news gets more eyeballs than good news, right?

I mean, both searches bring back loads of articles. The "fewer people" results were a lot more focused on the topic of people actually eating out at restaurants. The "more people" results, for one thing, brought back a lot of the same articles as the "fewer people" searches. For another thing, the "more people" results were a lot more diffuse, bringing back a lot of articles that have nothing to do with the number of people going to restaurants (e.g. "30 Sneaky Ways Restaurants Trick You Into Spending More Money", "You can tell who’s worked in restaurants based off the way they leave the table", etc.). It's been an enlightening exercise.

 

[Stoneworker]

An angle I hadn't considered -- maybe increased take-out can help buoy restaurant revenue even as fewer people "go out to eat". From NewsNation (also paywalled at WSJ.com), late April 2023:

I looked at the WSJ article. It appears the general trend is take-out is up, but in-house visits are down.

For Applebee's in particular:

Before the pandemic, about 13% of Applebee’s revenue was off-premise–mainly pickup. At the end of last year it was nearly twice that proportion with about half from delivery.

Then there was a chart showing Applebee's in-house visits are down 15% from Q1 2019

 

[Stoneworker]

@Doug B killing it with the research. Very informative. Thank you sir

 

[Doug B]

we have a bunch of people who vaguely think they are getting ripped off on delivery by the restaurants

Not I:

1) We have our favorite take-out places that we regularly show up for in person.
2) I regard the delivery services as priced well out of our range. Maybe down the road as we age and have to cut back on driving or something.

 

[Doug B]

It appears the general trend is take-out is up, but in-house visits are down.

Seems to be a common theme, and explains a lot of the observations made both by people in the industry and by some of us regular-Joes participating in this thread.