The Morning Ledger: How Some Restaurants Are Staying Out of the Deep Discounting Game

In today's Morning Ledger: Potbelly, Red Robin and Portillo’s are among the chains avoiding drastic price cuts across their menus; U.S. companies’?pension funding decreased in September; U.S. inflation eases to a new three-year low.

?? Good morning.?While many restaurants have rolled out substantial discounts and deals to attract inflation-weary consumers, some are trying a different strategy : introducing carefully sculpted offers to keep business flowing without training consumers to expect to regularly pay less, reports Jennifer Williams .

Sandwich chain Potbelly Sandwich Works in July added in most of its locations a $7.99 meal deal bundling a small sandwich, chips and a drink, for example, but diners won’t find sandwiches at around half-price as at Subway . “A lot of times you’ll see price-pointed discounts off of existing products,” said Potbelly Chief Financial Officer Steve Cirulis . The problem with that approach is attracting enough diners to outrun the discounts, Cirulis said, noting that while prices and deals at large chains such as Subway are on his radar, the two attract different diners. “It’s great to see brands attempting to provide customers with value, but it doesn’t necessarily compel us to then do a race to the bottom,” he said.

• After Years of Increases, Companies Are Rolling Back Prices

The Day Ahead

??? Earnings

• Bank of New York Mellon
• BlackRock
• JPMorgan
• Wells Fargo

?? Economic Indicators The University of Michigan releases its Consumer Sentiment index for October.

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U.S. Companies' Pension Funding Decreased in September

The estimated funding level of pension plans sponsored by S&P 1500 companies decreased by 1 percentage point in September to 107% as a result of a decrease in discount rates partially offset by an increase in equity markets, according to consulting firm Mercer LLC. As of the end of September, the plans’ estimated aggregate surplus decreased by $8 billion, to $121 billion, compared with a $129 billion surplus at the end of August, Mercer said.

“While long-term bond markets had already priced in much of the Fed’s September interest rate cut, we did see a slight decline in pension discount rates,” Mercer partner Matt McDaniel says.

—Jennifer Williams

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• U.S. inflation eased to a new three-year low but is cooling more slowly than expected, new data showed.The consumer-price index rose 2.4% from a year earlier in September, the Labor Department said Thursday, after rising 2.5% in August. That was higher than the 2.3% rise that economists polled by The Wall Street Journal had expected.
• U.S. stocks declined Thursday after a hotter-than-expected inflation report sparked questions about the Fed’s next move.
• Hurricane Milton spared Florida the catastrophic devastation that many feared but left at least seven people dead and around three million customers without power after it blazed a tornado-filled path across the state.
• TD Bank agreed to pay more than $3 billion in penalties and accepted limits on its growth in the U.S. as part of a settlement Thursday with regulators and prosecutors over charges it failed to properly monitor money laundering by drug cartels and other criminal groups.

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Follow us on X?@WSJCFO . The WSJ CFO Journal Team comprises reporters Kristin Broughton , Mark Maurer and Jennifer Williams , and Bureau Chief Walden Siew .

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