Sweetgreen, Chipotle and Wingstop aren't feeling the consumer downturn
A food delivery messenger carries a takeout bag outside of Sweetgreen in Manhattan, New York City, September 14, 2023.
Gina Moon | Washington Post | Getty Images
High-income consumers helped Chipotle Mexican Grill, wingstop and sweet green Report strong sales this quarter, countering broader market downturn consumer slump It's hurting other eateries.
as a whole, Restaurant industry Sales slowed and traffic declined as customers cut back on spending. mcdonalds, Starbucks and KFC owner yum brand It was one of several restaurant companies to report a sluggish start to 2024.
McDonald's CEO Chris Kempczinski said diners are looking for bargains and bargains.chain is working Introducing meals worth $5, CNBC reported Friday. and Applebee's owner and CEO John Payton. dining brandsaid the steepest sales decline comes from customers with less than $50,000 in revenue.
Fast-casual chains seem to be an exception to this trend. According to the company, this sector recorded higher traffic growth than other food and beverage sectors from November to February. Guest XM data.
In general, customers of fast-casual chains tend to have higher incomes than customers in the fast-food sector, which provides some insulation from the spending rebound of lower-income consumers. High-income consumers are not feeling the pinch as much as lower-income consumers.
Wingstop's same-store sales increased 21% in the quarter. CEO Michael Skipworth told CNBC that Wingstop's customer base used to be primarily low-income customers, but now about three-quarters are high-income customers. Ta. He also credited the company's success to increased brand awareness and its chicken sandwiches, which often serve as an entry point for new customers.
Similarly, most of Sweetgreen's stores are in high-income neighborhoods, CEO Jonathan Neiman said last year. On Thursday, the salad chain reported a 5% increase in first-quarter same-store sales. Full-year forecast raised Aiming to increase same-store sales. Traffic was flat, but executives said bad weather and New Year's Day and Easter had a negative impact on performance.
count of values
Chipotle and other chains are also getting a boost as consumers recognize the value of Big Macs and Whoppers as prices rise.
TD Cowen analyst Andrew Charles said fast-food chains raised prices more than fast-casual chains last year. Bowls and salads at fast-casual restaurants are still more expensive than burgers and chicken tenders, but the price gap between the two segments is narrowing.
“If you think about the quality of what they're getting, fast casual proves to be just a better value for that consumer,” Charles said.
For example, Chipotle Quarterly Existing store sales increased 7% increase, driven by a 5.4% increase in pedestrian traffic. CEO Brian Nicol told analysts on the company's April 24 conference call that the burrito chain has a strong sense of value among its customers. Chipotle executives have also previously emphasized that most of its customers are high-income earners.
Many fast-casual chains, including Chipotle and Sweetgreen, are also working to improve “throughput,” an industry term for how many bowls or salads employees can make. A focus on efficiency means faster restaurant service, leading to more business, Charles said.
Investors were already predicting that fast-casual chains would become outliers in consumer spending on dining out. Chipotle, Shake Shack, and Wingstop all rose at least 35% in 2024. Also, Sweetgreen's stock price doubled during the same period, excluding the stock price. 34% increase Alone on Friday. For comparison, the S&P 500 is up about 9% so far this year.
However, there are still exceptions to this segment's trends. for example, portillo'sThe company, known for its Italian beef sandwiches and Chicago-style hot dogs, said same-store sales fell 1.2% in the first quarter. The chain blamed the poor performance on “dreadful weather across the Midwest,” particularly early in the quarter.
Similarly, shake shack Although quarterly traffic numbers were negative, he said they would have been flat if not for the bad weather in January and February. The burger chain reported that same-store sales increased by 1.6%, but said the metric has been improving continuously every month. Same-store sales in April increased by 4.9% compared to the same month last year.
Mediterranean-inspired fast-casual chain kava Although the company's first-quarter results are not expected to be released until May 28, TD Cowen's Charles said he expects a strong quarter for Kava given the performance of its competitors. .
Summarize this content to 100 words A food delivery messenger carries a takeout bag outside of Sweetgreen in Manhattan, New York City, September 14, 2023.Gina Moon | Washington Post | Getty ImagesHigh-income consumers helped Chipotle Mexican Grill, wingstop and sweet green Report strong sales this quarter, countering broader market downturn consumer slump It's hurting other eateries.as a whole, Restaurant industry Sales slowed and traffic declined as customers cut back on spending. mcdonalds, Starbucks and KFC owner yum brand It was one of several restaurant companies to report a sluggish start to 2024.McDonald's CEO Chris Kempczinski said diners are looking for bargains and bargains.chain is working Introducing meals worth $5, CNBC reported Friday. and Applebee's owner and CEO John Payton. dining brandsaid the steepest sales decline comes from customers with less than $50,000 in revenue.Fast-casual chains seem to be an exception to this trend. According to the company, this sector recorded higher traffic growth than other food and beverage sectors from November to February. Guest XM data.In general, customers of fast-casual chains tend to have higher incomes than customers in the fast-food sector, which provides some insulation from the spending rebound of lower-income consumers. High-income consumers are not feeling the pinch as much as lower-income consumers.Wingstop's same-store sales increased 21% in the quarter. CEO Michael Skipworth told CNBC that Wingstop's customer base used to be primarily low-income customers, but now about three-quarters are high-income customers. Ta. He also credited the company's success to increased brand awareness and its chicken sandwiches, which often serve as an entry point for new customers.Similarly, most of Sweetgreen's stores are in high-income neighborhoods, CEO Jonathan Neiman said last year. On Thursday, the salad chain reported a 5% increase in first-quarter same-store sales. Full-year forecast raised Aiming to increase same-store sales. Traffic was flat, but executives said bad weather and New Year's Day and Easter had a negative impact on performance.Read more CNBC Restaurant Newscount of valuesChipotle and other chains are also getting a boost as consumers recognize the value of Big Macs and Whoppers as prices rise.TD Cowen analyst Andrew Charles said fast-food chains raised prices more than fast-casual chains last year. Bowls and salads at fast-casual restaurants are still more expensive than burgers and chicken tenders, but the price gap between the two segments is narrowing.”If you think about the quality of what they're getting, fast casual proves to be just a better value for that consumer,” Charles said.For example, Chipotle Quarterly Existing store sales increased 7% increase, driven by a 5.4% increase in pedestrian traffic. CEO Brian Nicol told analysts on the company's April 24 conference call that the burrito chain has a strong sense of value among its customers. Chipotle executives have also previously emphasized that most of its customers are high-income earners.Many fast-casual chains, including Chipotle and Sweetgreen, are also working to improve “throughput,” an industry term for how many bowls or salads employees can make. A focus on efficiency means faster restaurant service, leading to more business, Charles said.Investors were already predicting that fast-casual chains would become outliers in consumer spending on dining out. Chipotle, Shake Shack, and Wingstop all rose at least 35% in 2024. Also, Sweetgreen's stock price doubled during the same period, excluding the stock price. 34% increase Alone on Friday. For comparison, the S&P 500 is up about 9% so far this year.However, there are still exceptions to this segment's trends. for example, portillo'sThe company, known for its Italian beef sandwiches and Chicago-style hot dogs, said same-store sales fell 1.2% in the first quarter. The chain blamed the poor performance on “dreadful weather across the Midwest,” particularly early in the quarter.Similarly, shake shack Although quarterly traffic numbers were negative, he said they would have been flat if not for the bad weather in January and February. The burger chain reported that same-store sales increased by 1.6%, but said the metric has been improving continuously every month. Same-store sales in April increased by 4.9% compared to the same month last year.Mediterranean-inspired fast-casual chain kava Although the company's first-quarter results are not expected to be released until May 28, TD Cowen's Charles said he expects a strong quarter for Kava given the performance of its competitors. .Don't miss exclusive information on CNBC PRO
https://www.cnbc.com/2024/05/11/sweetgreen-chipotle-and-wingstop-arent-seeing-a-consumer-slowdown.html Sweetgreen, Chipotle and Wingstop aren't feeling the consumer downturn
