Restaurant Trends October 2022

US Quick-Service Trends

QSR US traffic is down 3.7% when compared to Q3 2021. However, traffic performance has slightly improved compared to Q1 and Q2 2022, mainly a result of comping against stronger performance last year.

Pricing activity continues to increase. Average price increased by 4.5% compared to the previous quarter, jumping from +10.7% YOY in Q2 to +15.2% YOY in Q3. RMS will continue tracking QSR traffic and pricing activity trends to gauge consumer price sensitivity in reaction to the inflationary environment.

Breakdown of Quarterly QSR Trends

The following is a snapshot of US Quick-Service Restaurant (QSR) trends for Q3 2022.

When compared to Q3 2021:

  • Net sales YOY remain positive at 6.3% in Q3 2022.
  • The increase in average check YOY (+10.5%) offset the decline in traffic trends YOY (-3.7%), resulting in continued positive net sales for the QSR segment in Q3.
  • QSR average price is at +15.2% and basket size is down by 4.1%. It is worth noting that the average price increase observed this quarter is the result of both value meal prices going up, and companies dialing back on their overall value platform. Overall, price is negatively impacting quantity per transaction. The decrease in basket size indicates that customers are starting to cut back on their spending. In Q2, when we surveyed over 750 US respondents2 in 5 reported spending less of their disposable income on restaurants. Of those spending less, 34% still visited restaurants but chose less expensive items, while 46% ordered less frequently from restaurants.

Daypart Trends

  • Breakfast traffic remains relatively stable compared to previous quarters, down -2.5% compared to 2021.
  • Lunch QSR traffic also remained stable compared to Q2 and now stands at -5.1% YOY.
  • Dinner saw the most significant increase in traffic compared to Q2, jumping from -5.3% in Q2 to -2.5% YOY in Q3.

Revenue Channels

Drive-thru traffic is down -11.2% YOY. While the channel continues to show the weakest performance among all revenue channels, traffic in Q3 remains stable compared to the previous quarter. It is worth noting that traffic was still comping against 2021 levels when mass vaccination efforts created a surge in restaurant visits.

Dine-in is the winner this quarter (+31.6%) though the channel saw a slight decline in traffic compared to Q2 2022. Delivery (+20.1%) and takeout (+18%) are still performing positively YOY and have remained relatively stable compared to the previous quarter.

As restaurants proceed with caution in the current inflationary environment, data-driven solutions based on specific guest patterns can help. Reach out today with questions. We’re here to help.

Consultant’s Corner

Are Consumers Hitting a Price Increase Breaking Point?

QSR prices hit a record-high increase of 16.3% YOY in August 2022. How much price can QSRs take before consumers say “enough?” Our data science experts found the breaking point. RMS’ COO Mark Kuperman and Director of Consulting Services Scott Foxworth shared their insights in a recent article in Nation’s Restaurant News.

Fine Dining May Not Be Immune to Inflation Pressures After All

How are fine-dining restaurants adjusting to inflationary pressures? While some are taking price, others are offering value-positioned deals. A recent Restaurant Business article interviewed RMS’ Justin Pridon for his perspective on loss leaders based on RMS consumer insights.

RMS is ready to support restaurant brands through these ever-changing times. Reach out to us today for practical strategies to optimize your menu profitability, sales and financial health.

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