Sales at eating and drinking establishments are up more than 4% this year to surpass the 3% rise in grocery store spending, according to YTD data from the U.S. Census Bureau. Higher prices account for some of the growth.
"Generally speaking, the consumer — particularly the middle to upper middle-income consumer — is healthy. This group has benefited from stock market gains, stable asset markets, wage growth that is pretty healthy," notes Morningstar restaurant analyst R.J. Hottovy on the solid pace of restaurant sales.
While sales may be topping expectations, operators have felt some margin pressure on the labor front and from new tech/delivery costs.
Restaurant stocks: Arcos Dorados (NYSE:ARCO), Ark Restaurants (NASDAQ:ARKR), Biglari Holdings (NYSE:BH), BJ's Restaurants (NASDAQ:BJRI), Bloomin Brands (NASDAQ:BLMN), Brinker International (NYSE:EAT), Carrols Restaurant Group (NASDAQ:TAST), Chipotle (NYSE:CMG), Chuy's Holdings (NASDAQ:CHUY), Cracker Barrel (NASDAQ:CBRL), Darden Restaurants (NYSE:DRI), Dave & Buster's Entertainment (NASDAQ:PLAY), Del Frisco's Restaurants (NASDAQ:TACO), Del Taco (TACO), Denny's (NASDAQ:DENN), Dine Brands (NYSE:DIN), Domino's Pizza (NYSE:DPZ), Dunkin' Brands (NASDAQ:DNKN), El Pollo Loco (NASDAQ:LOCO), Famous Dave's of America (NASDAQ:DAVE), FAT Brands (NASDAQ:FAT), Fiesta Restaurant Group (NASDAQ:FRGI), J. Alexander's (NYSE:JAX), Jack in the Box (NASDAQ:JACK), McDonald's (NYSE:MCD), Nathan's Famous (NASDAQ:NATH), Noodles (NASDAQ:NDLS), Pepper Food Service (NYSE:PFGC), Performance Food Group (PFGC), RCH Hospitality (NASDAQ:RICK), Red Robin Gourmet (NASDAQ:RRGB), Restaurant Brands International (NYSE:QSR), Ruth's Hospitality (NASDAQ:RUTH), Texas Roadhouse (NASDAQ:TXRH) Cheesecake Factory (NASDAQ:CAKE), Habit Restaurants (NASDAQ:HABT), One Group Hospitality (NASDAQ:STKS), Wendy's (NASDAQ:WEN), Waitr (NASDAQ:WTRH), Wingstop (NASDAQ:WING), Yum China (NYSE:YUMC), Yum Brands (NYSE:YUM).
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