Still looking for a little bit of holiday spirit in the 11th hour?
How about those gas prices, which have fallen like a brick since their peak in the spring. There are now 20 states with average gas prices below $3 per gallon, according to AAA.
Why does this matter? High gas prices directly impact restaurant foot traffic, particularly at drive-thru/drive-in concepts. Consumers not only try to drive less when they pay more at the pump, they’re also forced to shift their discretionary dollars. High gas prices of course also impact businesses. When the average price-per-gallon hit record highs in March, for instance, 68% of small business owners said high fuel costs were hindering their sales. Fortunately Santa has brought us all some timely relief.
Still feeling Grinchy? Well, consider that consumer confidence in December reached its highest level since April. The Conference Board’s consumer confidence index was 108.3 in December, up nearly seven full points from the month prior and driven by plunging gas prices, softening inflation and consistently low unemployment rates. Consumers are feeling more buoyant than they have in months and that has to be good news for restaurants, right?
Generally speaking, small businesses are optimistic for 2023 despite continued labor and supply chain issues. A new report from Bank of America found that two-thirds of small business owners expect revenues to increase next year, and more than half plan to expand their business.
Still, it’s important not to get too Pollyannish and end up like that cartoon meme with the dog sipping coffee in the middle of a burning building. The consumer confidence index may be higher than it’s been in some time, but it remains low-ish, or more specifically, at a level typically associated with recession. And, predictions of a 2023 recession continue to swirl, though they’ve become a bit more inconsistent as of late. Seventy percent of economists forecast a full recession in the new year, however Amazon – which has a stronger pulse on the economy than most companies – estimates just a 30% chance of a full recession. For the sake of finding that holiday spirit, let’s go with Amazon here.
An NRN prediction manifests as a push notification
The Nation’s Restaurant News editorial team took to LinkedIn live (with drinks!) earlier this week to discuss some 2023 predictions and one of my colleagues – Holly Petre – said she believes that TikTok will continue to impact the restaurant space both as an effective marketing tool to reach a wide swath of consumers and as a discovery tool for those looking for a bite to eat.
It has been widely reported in recent months that TikTok has overtaken Google as the world’s most used search engine, so Petre’s prediction is completely viable, particularly as TikTok-heavy Gen Z consumers gain a tremendous amount of spending power.
TikTok’s meteoric rise comes as Google strives to plant a bigger flag in the restaurant space. In 2019, for instance, the Google Maps app was updated to highlight restaurants’ most popular dishes and the website added online ordering capabilities to allow customers to order food from Google Search, Maps and Assistant. Google may be feeling the heat as more consumers turn to TikTok and delivery aggregates like DoorDash to pick a meal. In the past several weeks, and out of the blue, I’ve received several push notifications from Google Maps prompting me to “find restaurants, grocery stores, and more.” As per Petre’s prediction, it seems as though the fight over restaurant search is just beginning.
Contact Alicia Kelso at [email protected]