As summer wanes, tread lightly on easing inflation
In recent months, restaurant operators have been optimistic about a boom in summer sales. According to a survey by Datassential, nearly half of operators have been anticipating higher sales or improved traffic.
The vast majority of surveyed consumers, however, indicated that they would either curtail their spending in restaurants or hold it steady. McDonald’s CEO Chris Kempczinski recently said this has resulted in more of their customers skipping the fries with their order, for example. Consumers have responded similarly with other summer splurges like hotel stays and air travel. Granted, this was before the recent announcement that inflation cooled in June. And while this won’t necessarily prevent a July interest rate hike, future increases are less likely. As a result, consumers may finally feel more optimistic about an improving economy – and more relaxed about opening their wallets. But be prepared if guests are still holding back a bit. The inflation gap for restaurant food and grocery food widened in May for the third straight month, so consumers are well aware that they’re paying more to dine away from home. As a result, the value offers and limited-time promotions that you might otherwise pause during a summer rush may still be helpful in driving traffic in the remaining weeks of summer. You may even be able to entice people who have opted out of summer travel to redirect some of their savings on dining out. |
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