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Proprietary Data Insights Top Food Distribution Stock Searches This Month
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A Fond Farewell Earlier this month, The Juice detailed data that showed people – particularly prospective homebuyers – leaving relatively expensive cities, such as San Francisco, Los Angeles, and New York, for more affordable enclaves, including Miami, other parts of Florida, and San Antonio. On the heels of these stats and our story, we decided to do more digging. First, we hit up Trackstar, our proprietary database of the tickers investors search for most. It led us to food distribution companies. These companies deliver goods and provide services to restaurants. The two biggest – Sysco (SYY) and US Foods (USFD) – delivered earnings beats this month. We dug into each company’s earnings conference call and found this prediction from Sysco: Interestingly, the relative price of eating out has been less impacted by inflation than the cost of food at the grocery store as seen on Slides 8 to 9. When coupled with people’s desire to eat out, we believe that restaurants will once again prove resilient. Makes sense. Inflation is up 13.1% for food at home, year-over-year. The cost of food away from home increased 7.6% annually. Between June and July, increases for food at home and food away from home were 1.3% and 0.7%, respectively. Unfortunately, neither Sysco or US Foods breaks down sales by city. This could be a good way to gauge the impact of the aforementioned migration patterns on the cities people are leaving and going to. There’s no better way to take the temperature of a place – after housing and employment – than by looking at hospitality. So, The Juice got creative. Scroll with us. |
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Table For Zero |
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Key Takeaways:
Enter OpenTable – the online restaurant reservation platform – owned by Booking Holdings (BKNG). For the record, Booking Holdings also owns Priceline.com, Booking.com, and Kayak.com, and other travel and travel-related sites. OpenTable publishes a treasure trove of useful data. Particularly, the company compares daily reservations in 2022 with the same day in 2019. The results are telling and jibe – almost across the board – with migration patterns. While we can’t say they confirm the widely-reported downfall of big, relatively expensive cities – other data counters this hysteria – it does add to our attempt to understand an otherwise confusing economy. Here we go. Check out the upside OpenTable is seeing in restaurant reservations between 2019 and 2022 in Austin: Nice and green almost every day so far in August. And San Francisco versus San Antonio and another popular relocation city, San Diego: Reservation numbers are down in New York City also: And check out Miami, the #1 relocation destination, despite its soaring rents: As expensive as Miami is, it still costs less to rent there than it does San Francisco, Los Angeles or New York. So maybe people moving to Miami are taking some or all of their housing savings and spending it in restaurants and bars. Look at this way – you’re too poor to own, but rich enough to rent so why not move to a cool city that isn’t SF, LA, or NY where your discretionary dollar can take you farther. When you break things down by state, you see much of the same. Lots of green in states such as Arizona, Florida, Nevada, and Texas. And lots of red in California and New York. The Bottom Line: A few points. This is only OpenTable data. Not every person or restaurant uses OpenTable. Some people don’t make reservations when they dine out. Some restaurants don’t take reservations. Certainly not a lot of relatively lower-priced options. Maybe instead of a big night out in San Francisco or Los Angeles, people there are leaning towards more affordable options, such as a burrito (can’t beat them in San Francisco’s Mission District) or taco (a staple at food trucks throughout LA). That said, there’s a data trail that shows something’s up. It likely all ties back to housing. Of course. Next week, The Juice goes beyond the headlines you keep reading about a housing slowdown amid decreasing demand, rising inventory, and sellers dropping prices. Piecing the economic puzzle together.
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