Despite higher prices impacting consumer spending, the restaurant industry has maintained strong performance with steady sales growth. It is well-positioned for further expansion due to decreasing inflation, rapid digitization, evolving consumer preferences, and the growth of online delivery services.
Before diving deeper into their fundamentals, let’s discuss why the restaurant industry is well-positioned for growth.
Since the pandemic, the restaurant industry has seen a surge in demand for online food delivery services, offering diverse cuisine options. Success will come to those who adapt to evolving consumer preferences.
The restaurant industry is expected to see robust growth in the near term due to the rising popularity of dining out, takeout, and delivery. Factors like resilient consumer spending, increased spending on dining experiences, the trend toward experience-based dining, and greater adoption of digital technology to meet evolving customer preferences are driving this growth.
The National Restaurant Association (NRA) anticipates ongoing consumer visits to restaurants, projecting that the U.S. restaurant industry will achieve $997 billion in sales in 2023.
The restaurant industry’s strength is evident as eating and drinking places reported total sales of $90.80 billion in August. Additionally, August sales were 0.3% higher than July’s revised figure of $90.50 billion, according to preliminary data from the U.S. Census Bureau.
Furthermore, digital technology is reshaping the restaurant industry, cutting costs, improving efficiency, and enhancing customer experiences with AI, cloud solutions, self-service options like kiosks, and online delivery, alongside ongoing partnerships with food delivery aggregators.
The global foodservice market is expected to grow at a CAGR of 10.8%, reaching $5.42 trillion by 2030.
Considering these conducive trends, let’s analyze the fundamental aspects of the three Restaurants picks, beginning with the third choice.
Stock #3: Starbucks Corporation (SBUX)
SBUX operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America; International; and Channel Development.
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