Things have been tough for restaurant stocks this year. High inflation — particularly the sharp rise in gas prices — is pinching lower- and middle-income families and negatively impacting their spending on other goods. To make things worse, restaurants are grappling with higher input costs as prices of raw materials like beef have spiked this year.
While restaurants might have wanted to pass on higher input costs to customers, the macro slowdown, reflected in sluggish same-store sales growth, has reduced room to raise prices. On the contrary, companies have been racing to offer affordable options to lure more customers to ordering.
