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During a recession, there is a decline in consumer spending when the credit markets become harder and harder for consumers to utilize. This is a key trigger point we are watching very closely as the impact on the casual and fine dining sales will most likely be the first to be affected.
Our Foodable Labs data shows that current trends for consumer traffic have been trending down for most sectors.
Fine Dining down 3.9% Q1 vs Q2
Casual Dining down 4.7% Q1 vs Q2
Fast Casual down 1.4%
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Q1 vs Q2
QSR up .053% Q1 vs Q2
Recessions can be caused by a financial crisis, the bursting of a real estate or stock market bubble, or some black swan event that causes consumers to lose faith in the economy. Combine this with the current macroeconomics of global conflict, food supply shortages, and energy on the brink of supply problems in G20 nations, and you have the ingredients for a full-on recession.
When GDP for the April through June period is released, it may be negative again, and by one common rule of thumb, two-quarters of negative GDP growth would mean the U.S. is already in a recession.
That remains far from the case under the more formal standards economists use, particularly because hiring, perhaps the most important marker, remains very strong. A recent Reuters poll showed economists upping the likelihood of a downturn over the next year to 40%, but until workers start losing jobs, it is unlikely one has begun. The issue with the restaurant issue is we are already seeing the first signs of slowing job growth and reversal of job numbers for the first time in two years.
So what are the things you can do to prepare? In this episode, we dive into a discussion with Ricky Richardson of Eggs Up Grill to talk about the tactics to help your restaurant business survive and thrive in these uncertain times.
Discussion Points
Management Preparation, how and what kind of team you should be building or grooming.
Technology - prepare for more automation and more CRM integration.
Menu Management - getting things right by maximizing and building new concepts - more with less.
Marketing - more important than ever with market shares up for grabs and limited consumer spending on the rise.
8 months ago
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