YUM - McDonald's to Wingstop may be benefiting from shoppers but consumers are also spending less

2023-08-21 15:12:23 ET

Alongside our persistent shopping habits, we’re also dining out plenty.

A survey of private chains suggests that positive year-over-year retail traffic trends so far this year have been a “slight” tailwind for restaurant sales that rely on retail activity as a traffic generator, Baird Equity Research found. Casual dining appears to be the largest beneficiary.

But, that could be temporary, with analysts pointing to a post-pandemic bounce that could fade.

Among those likely impacted are: BJ's Restaurants, Inc. ( BJRI ), Dutch Bros Inc. ( BROS ), The Cheesecake Factory Incorporated ( CAKE ), Cava Group ( CAVA ), Chuy's Holdings, Inc. ( CHUY ), Chipotle Mexican Grill ( CMG ), Domino's Pizza, Inc. ( DPZ ), Darden Restaurants ( DRI ), Jack in the Box ( JACK ), El Pollo Loco Holdings ( LOCO ), McDonald's Corporation ( NYSE: MCD ), Portillo’s ( PTLO ), Restaurant Brands International ( QSR ), Starbucks ( SBUX ), Shake Shack ( SHAK ), Texas Roadhouse ( TXRH ), Wingstop ( WING ) and Yum! Brands ( YUM ).

Prior to the pandemic, there was a “relatively consistent pattern” of year-over-year declines of about 4% on average that appeared to have a negative influence on pop-in occasions for restaurants, Baird found.

So far this year, retail traffic has been average growth of about 12%.

Baird reported that all of the casual dining chains indicated units located in or near shopping centers are delivering comps near or above the system average, whereas prior to the pandemic those locations were underperforming.

Maybe it’s Messi’s fault

While we’re definitely out and about, we appear to be spending less when we do dine out.

Restaurant spending growth decelerated from 5.3% in June to 4.1% in July on a one-year basis, according to Bank of America Corporation credit and debit card spending data.

Casual dining slowed after a June rebound, decelerating from 5.1% year-over-year to 3.4% in July, Bank of America said in an August 11 note.

In July, Cleveland had the highest year-over-year growth of 11.1% versus 12.1% in June, while Miami had the lowest at 0.3%, perhaps because everyone was busy chasing Lionel Messi at Publix . Austin was lowest in June at -0.5%.

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