The Food Dollar

Last time we discussed the squeeze on margins at the restaurant level due to commodity price inflation.  Today let’s look at the race to grab the food dollar.

Ever since the onset of the financial crisis began, customers have been very conscious of spending behaviors. Coupon use increased by double digits in 2008 and 2009.  Discount grocery chains outpaced their full service (read: full priced) counterparts.

While the economy might seem better to many folks, there still remains trepidation to spending which is having an effect on the restaurant business.  The white tablecloth diners are not as concerned as the patrons of Quick Serve format restaurants.  Those establishments are finding evening and weekend dining has slowed, hence the scramble (pun intended) to get breakfast hours on the door and items on the menu.

Same store sales on average are increasing at less than 1% while the inflation pressures are many times higher, yielding essentially a same store loss when compared with last year’s unit volume. Creative menu offerings are the driving force to spark sales to a new and different demographic, but how many ways can Taco Bell repackage the same basic 4 food items?

It will be interesting to get a pulse on the mood of the distributors and operators at this year’s Foodservice event in Monterey, California.  There are so many topics to get a conversation started – drop by booth #68 and start one with me!