Consumer Spending to Decrease in Coming Months
Consumer spending at restaurants is expected to weaken throughout the summer, as consumer confidence and intent to spend continue a five-month decline, according to Kurt Salmon's Restaurant Spending Trajectory.
The proprietary index, which tracks consumer confidence and intent to spend on dining out, has been highly correlated with personal consumption expenditures at restaurants over the last five years.
"Although restaurants saw a small spending uptick in May, consumers are still cautious about the fragile economy and are making increasingly concerted efforts to trim spending," says Kurt Salmon restaurant strategist Todd Hooper.
"Going out to eat can be an easy target for those looking to reduce spending, and consumers will cut back on marginal restaurant visits and stop frequenting weaker concepts," Hooper says. "Restaurants that establish themselves as core to consumers' lifestyles will still do well."