Foodservice demand is revving up for a torrid summer.
In fact, restaurant and bar seasonally adjusted spending in May totaled a record $67 billion, up from $66 billion in February 20, said Michael Swanson, chief agricultural economist with Wells Fargo.
“That was for May, where we had limited capacity,” he said, adding that a lot of bars and restaurants are still understaffed.
The inability to get staff into restaurants is holding back sales, he said.
Swanson said the consumer demand for away-from-home food will persist at high levels for months, as consumers rebook travel they had postponed and have more freedom for social gatherings.
Swanson said restaurant operators have raised prices on their menus, and some of the dollar menus have been removed.
In addition, he said that restaurants have reworked their menus to drop items that were difficult to prepare or had smaller margins.
“A lot of those items have come off the menu and so (restaurants’) average ticket has gone up,” he said.
Fresh fruits and vegetables may not benefit from some menu adjustments.
For example, Mcdonald’s removed salads from its menus early in the pandemic and has not said when it will reintroduce them.
“There’s a situation where the fruits and vegetables have been negatively impacted by their move to try to improve their menu profitability,” he said.
In addition, other restaurant chains have reduced the salad selections they offer.
The effect of the foodservice rebound on supermarkets may not be severe, Swanson said.
“Supermarket sales have actually stayed very strong, even with the recovery in the restaurant spending,” he said. “Right now, the combined spending between restaurants and supermarkets exceeds the previous peak by about $14 billion, so everybody is doing well at the moment.”
Swanson noted that many supermarkets are bringing back salad bars, which he said should be a good source of demand for produce shippers.
