— This is the script of CNBC's financial news report for China's CCTV on November 22, 2022.
Data show that U.S. consumers have tightened their wallets and eaten out less often in recent months as prices have risen.
U.S. consumers have cut back on eating out due to high prices and the need to reduce spending, according to a recent survey by market research firm Datassential.
According to Black Box Intelligence, same-store traffic in October was down 3.2% year-over-year. Even so, this was the best month since March. In fact, U.S. restaurant operators have experienced eight consecutive months of negative same-store traffic growth year-over-year.
Additionally, restaurant operators face a number of cost pressures as a result of rising costs. The U.S. restaurant chain Cameron Mitchell Restaurant, for example, has seen its costs increase dramatically over the past year, including ingredient prices, labor, and construction. The restaurant is passing on the rising costs to its customers. According to its CEO, the past week has been the company's highest revenue week in non-holiday history, however profits were lower.
Cameron Mitchell
Cameron Mitchell Restaurants founder and CEO
"I gotta say, you know, in my 42 years in the restaurant business, this is the worst cost environment I've ever operated. I've never seen this before, we've had to take a fairly aggressive pricing strategy, we normally up 3.5% A year, we've doubled our prices."
According to the U.S. Bureau of Labor Statistics, the price of food consumed away from home has risen 8.6 percent over the past 12 months through October.
Restaurants of different sizes, large chains and individual operators have different advantages in facing the current difficulties.
It is possible for large restaurant chains like McDonald's and Starbucks to negotiate better prices for ingredients with suppliers due to their size and volume of purchases. Such organizations, however, are also relatively slow to respond to cost fluctuations and encumbered with bureaucracy.
In contrast, independent restaurants are able to make adjustments more quickly, such as modifying menus and updating prices. However, they lack the cash flow and resources on the scale of large chains and need to bear higher costs.
According to a survey of approximately 2,400 U.S. consumers conducted by PYMNTS.com, a payments data research firm, more than one-third of respondents said they consider price when visiting a large chain restaurant, whereas only 22.5 percent said they consider price when choosing a mom and pop restaurant. Due to the human touch and authenticity of family-run restaurants, consumers are more inclined to spend their money to support them.