Will Higher Food Prices Spoil Diners' Appetites?
Dining-out buffs could find themselves chewing on sticker shock as a side dish.
Restaurant traffic has steadily improved for most operators over the past few months, indicative of an improving consumer spending environment, and supporting our mid-single-digit top-line growth forecast for the restaurant industry in 2011. However, we don't believe the magnitude of commodity inflation has been fully recognized by the market, and we would not be surprised to see cautionary revisions to full-year expectations from many restaurant companies during the coming quarters.
A heady mix of supply shocks and growing demand from developing markets has spawned a formidable surge in year-to-date protein, grain, and dairy commodity prices. Given these rising costs, we would not be surprised to see restaurant operators cooking up ways to offset the looming cost headwinds over the coming months. As hedges against input costs expire throughout the year, restaurant operators will undoubtedly be forced to either raise prices on customers, or swallow the cost increases themselves.
Jeremy Cohen does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.