Falling commodities costs and China easing lockdowns look good for eateries
With the cost of butter plunging nearly 16% in a month and wholesale broiler chickens getting cheaper, big restaurant chains including McDonald’s and Starbucks are likely to tell investors that their restaurants will be more profitable this year.
In 2023 restaurants are expected to be more profitable — though not back to pre-pandemic levels — at McDonald’s, Taco Bell parent Yum Brands, Burger King owner Restaurant Brands International, Domino’s Pizza, Starbucks and Olive Garden parent Darden Restaurants, according to Wells Fargo research. “Some consumers are likely to reduce or eliminate their visits given the above-average price hikes,” Saleh wrote. But investors should tolerate a slight drop off in transactions because margins will still be “significantly higher”.
Meanwhile, average wholesale prices for chicken wings in December had fallen to 89c per pound after peaking at $3.25 in May 2021, US department of agriculture data showed.
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