The restaurant business is always fought on the margins, but how have several oft-frequented chains doing in this economic environment? MSSI data on spending at restaurants IHOP, subsidiary of DineEquity (NYSE: DIN), Burger King (NYSE: BKC), Doctor’s Associates’ Subway and family-owned Sbarro chain show that 2008 was an interesting year and 2009 is off to a similar start.
MSSI statistics from March 12 show that spending at these first three restaurants have dropped steeply. IHOP has observed a 19.72% decrease in average Geezeo customer spending per month from November, whereas Subway has seen a less extreme, but still noticeable 5.82% decline.
Consumers spending, as evidenced by MSSI data, at fast-food retailers Burger King and Sbarro have seen the opposite trends since November. Average monthly spending has increased 3.70% and 8.18% at the restaurants respectively.
The changes in spending at these four retailers follow these same trends in a more expansive timetable. Since January 2008, average spending at IHOP and Subway have decreased by 3.55% and 5.11% overall. Concurrently, spending at Burger King and Sbarro has increased by 16.77% and 24.95%.
The year-on-year data for these firms show that higher food prices have indeed led to marginally higher spending, but not enough to off-set consumer tastes.
Burger King and Sbarro are seeing higher revenues, since their easy, low-cost menus have given consumers options in these tighter times. Also their profitability revolves around volume, which, unlike more costly dining options, has not skipped a beat.
Geezeo users visits per month to each of these four restaurants follow directly with the spending trends from January 2008.
This data was compiled by the Geezeo Main Street Spending Index (MSSI).