This month we look at: chicken wing costs, some new inflation numbers, a few mistakes when opening a new restaurant (and how to avoid them) and national restaurant sales trends from July.
No matter where your restaurant is, you are probably head first into the dog days of summer serving lots of cold beverages (with high profit margins). Cheers to more drinks!
A particularly interesting article was in Sunday’s Wall Street Journal saying there’s going to be a supermarket vs. restaurant battle for consumer spending. Not sure how there’s any comparison, restaurants serve food and hospitality. Would love to hear your thoughts on this, drop me a line and let me know if you consider your competition to be the local Kroger (or whatever’s popular in your area).
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- Tracy & the MarginEdge team
MONTHLY SALES METRICS & UPDATE
By segment, Fast Casual beat out Full Service, with 3% sales growth, and Full Service at -1% compared to July 2022's numbers. Fourth of July celebrations saw a big boost in sales for Full Service all week long.
I know, I know, you’re asking why now? Well, we saw in the news wing juggernautWingStopearnings could be impacted by rising chicken wing prices and wanted to check into this for our clients. Additionally, withNational Chicken Wing Dayon July 29th we figured there might be a price movement due to increased demand.
Hickory-smoked, deep-fried, grilled or baked, Americans dipped and wet-napped themselves a heck of a lot of wings last month.SpotOnsaw more than 12.7 million orders of wings sold in the month of July!
Thanks to some handiwork by our data science team, we can now slice and dice the data by week for you. As of July, chicken wings were the 18th most ordered item in our data, and prices rose over 9% compared to June. Analysts referenced30% price increaseswhich we definitely did not see (thank goodness). There was a small pop the 2nd half of the month which was probably due to the increased demand in preparation for National Chicken Wing Day.
Our data shows median chicken wing prices in June 2023 were down 42% from last year and July 2023 showed median prices 34% cheaper. Record-high beef and pork priceswill likely keep chicken on consumer’s minds as they order.
Oak & Ola | Tampa, FL
ASK [me] ANYTHING
I know I need to do a better job taking inventory, how do I get started?
Inventory is one of those necessary tasks (some might even call it a necessary evil) you’ll need to do tosee your restaurant’s profitability. While we wish it was a lot easier and faster, we did come up with a hack if you want to take the crawl-before-walking approach. If you are short on time or resources and still want to make an impact in between monthly (or longer) counts, here’s our hack: do a quick count of your top five highest-cost key items before you make an order. You can read the deetshere.
If you are ready to dive into taking a full inventory, we do have some tips on our help site and a handy step-by-step guide.
Ask [me] anything! Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting or restaurant operations in general? Email me or message us on our social media channels.
El Rey | Arlington, VA
Order Inflation Up (a little)
Like your favorite song, inflation was on repeat last month, with a 0.2% increase in July’s Consumer Price Index (CPI). For restaurants, the index was up the same for full service and limited service, 0.2% over June. Over the last 12 months, theBureau of Labor Statisticsshows an increase of 7.1% for restaurants compared to only 3.6% for groceries. Of note from data scientistMichael Lukianoffwas the, “12-month trailing restaurant CPI dropped meaningfully while the headline CPI number moved in the opposite direction.”
And in another repeat from last month, consumers don’t seem concerned. Anecdotally, weekend nights are packed especially in tourist destinations and the University of Michigan consumer sentiment survey jumped once again (11%) to a 22-month high in July. Dana Peterson, Chief Economist at The Conference Board noted, “Greater confidence was evident across all age groups, and among both consumers earning incomes less than $50,000 and those making more than $100,000.”
Carytown Cupcake | Richmond, VA
Celebrating 20 years (how is this even possible) is, “One of the biggest food fads of the 21st century,” – yep, the PSL (Starbucks pumpkin spice latte for the uninitiated).
Unsurprisingly, Starbucks’pumpkin spiceline is already making its debut on grocery store shelves and hitting cafes in less than two weeks. SpotOn reportsover 600 pumpkin menu itemshave been added to their independent restaurant's menus between July 8 and August 7.
Love it or hate it, pumpkin’s not a fad going away anytime soon. Google Trends shows the search term pumpkin is at interest level 100 as of August 10. Are you featuring any pumpkin dishes this fall? Tag us on your socials @marginedge, we’d love to see them.
The Future of Restaurants Continues to Evolve- Last month McKinsey, this month Deloitte. Positive sentiments coming out of the report, including more than half of consumers surveyed, said they are dining out more than before the pandemic.
🎧 PODCASTS WE'RE DIGGING
Beyond the Kitchen- New Orleans is a culinary titan – this podcast dives into the people and personalities continuing traditions and solidifying the Crescent City as a foodie destination.
A Fork in the Road- Host David Zelski brings personal stories from Georgia's farmers, fishermen, merchants, artisans, chefs, and others who help provide Georgia-grown products to folks in the Peach State and beyond.