Restaurant Trends April 2023
US Quick-Service Sales & Traffic Performance
QSR US traffic (-0.7% YOY) is approaching Q1 2022 levels when traffic was relatively high due to Omicron recovery traffic.
Average price increases are slightly lower, at 13.8% YOY, compared to last quarter’s +16.5%. Revenue Management Solutions analysts observe that while pricing activity is cooling, year-over-year price remains elevated due to shifting customer behavior. Quantity per transaction is down significantly as customers forego less expensive add-on items (sides, desserts) to save money, which results in average price increases. Overall, we anticipate prices to stabilize after the bullish price increases of 2022.
Breakdown of Quarterly QSR Trends
The following is a snapshot of US Quick-Service Restaurant (QSR) trends for Q1 2023.
When compared to Q1 2022:
- Net sales remain positive at 7.7% YOY.
- Traffic is down -0.7%. Sales continue to be fueled by average check increases (+8.5% YOY).
- Average price increased by 13.8% YOY, and the U.S. Bureau of Statistics stated in its March 2023 report that Food-Away-From-Home (FAFH) prices (+8.8% YOY) exceeded Food-At-Home (FAH) (+8.4% YOY) for the first time in 18 months.
- Quantity per transaction declined (-4.7% YOY), suggesting “trade down” activity. In addition, “trading out” remains a concern. In RMS’ latest quarterly consumer survey, 61% of respondents that reported spending less at restaurants are doing so by ordering less often.
- As we see behaviors change due to price sensitivity, it is more important than ever for restaurant brands to optimize their pricing strategy and the overall experience they offer their customers.
- Breakfast and lunch performance is down -2.3% YOY compared to the last quarter.
- Dinner continues to outperform other dayparts. Traffic is up + 1.8% YOY in Q1 2023.
- Dine-in (+33.0% YOY) is the top-performing QSR channel in Q1 2023, a slight increase compared to the previous quarter (+30.8 YOY).
- Takeout (+25.0% YOY) continues to perform positively.
- Delivery is up +16.8% YOY. Despite potential service and fee costs, customers continue to value its convenience.
- Drive-thru year-over-year traffic is down -9.0%.
Consumers May Be Losing Their Resilience
Will US consumers continue to cut back on their spending? In RMS’ latest consumer report, of those who reported spending less, 61% say they are ordering less often from restaurants, and 40% are opting for more affordable restaurants. Surprisingly, higher-income consumers are leading the trend. Get a rundown of the state of the industry in a recent Restaurant Business article featuring RMS insights.