Restaurants Expect Strong Sales This Summer. Consumers Aren’t So Sure

• Warmer weather usually boosts restaurant sales, but diners may hold back for the second straight summer as inflation weighs on consumers’ minds — and wallets. “I think operators are still hopeful for a good summer boon in foot traffic and sales, but I think on the consumer side, they’re more hesitant.” said Huy Do, Research and Insights Manager at market research firm Datassential.
• Last year, consumers pulled back on their restaurant visits in May, June and July amid inflation concerns. Salad chain Sweetgreen said its sales slowed after Memorial Day and blamed the trend on a range of factors, including erratic returns to offices and surging summer travel. Chipotle told investors that its sales decelerated starting in late May, citing the broader economy, its new workforce and a return to normal seasonal fluctuations in college towns. And ShakeShack said its June sales disappointed as lower-income consumers visited less frequently.
• Inflation may be easing this year, but prices are still rising, adding to worries about regional bank failures and a potential recession before year-end. According to a University of Michigan consumer survey, U.S. consumer sentiment fell to a six-month low in May, fueled by concerns about the debt limit standoff.
• Roughly a third of consumers surveyed by Datassential plan to dine out less over the next month, and about half plan to maintain their restaurant-spending habits. Despite diners’ caution, restaurants are optimistic that they’ll still see a summer boom. Nearly half of the operators surveyed by Datassential anticipate higher sales or improved traffic this summer season.
• Companies based in the US restaurant Industry may experience less than ideal results this summer as inflation continues to weigh on consumer spending. As a result, consumers may opt to substitute eating out for dining in.

(Source: CNBC)