Promising Start to 2024: The Restaurant Industry Ended 2023 on a High Note

Restaurant Intelligence as of January 29th:

As average check growth slows due to smaller price increases, contributing to a decline in restaurant traffic, economists express cautious optimism about a stabilized labor market and averted recession, with inflation nearing the Fed's target; meanwhile, restaurants benefit from retaining experienced general managers, showing lower turnover and outperforming in sales and traffic growth.

Here are a few key takeaways:

• As average check growth decelerates, driven primarily by smaller price increases, it has contributed to a slowdown in the erosion of restaurant traffic.
• According to Forbes, most economists are cautiously optimistic that a recession has been avoided and that the labor market has finally settled. While inflation remains higher than ideal (3.3%), it is much closer to the Fed’s 2% target, which means interest rate hikes are likely behind us.
• General managers in the top quartile of tenure enjoyed total employee turnover 16 percentage points lower for their restaurants. They outperformed on sales and traffic growth by 1.0 percentage points compared to those restaurants in the bottom three quartiles of general manager tenure.?

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