Big chain restaurants, especially fast-food ones, are going to have an advantage over small, local ones in dealing with the omicron variant of the COVID virus, a financial analyst with Bank of America told Yahoo News.
Sara Senatore, BofA’s global research senior analyst for restaurants, said on the internet broadcast “Yahoo Finance Live” that she expects foodservice in general to pick up due to enforced lockdowns from omicron. That was the opposite of what happened in the first wave of the pandemic, but Senatore says that some factors are working in favor of restaurants this time, notably inflation.
“So that's why we say when food prices go up it actually somewhat improves the relative value proposition of going out to eat, because what you're seeing in the grocery store is probably going to be even higher in terms of the rate of inflation than the rate of inflation on the menu prices,” Senatore said.
The large chain restaurants, especially quick-service ones, are in a better position than small ones to cash in on this surge, she said, because of their clout with suppliers. As ingredients and other supplies become expensive and hard to find, the big chains find it easier to lean on suppliers, especially ones with which they have long-standing relationships.
Quick-service restaurants are in an even better position because of inflation-conscious consumers, she said: “As food prices go up, what you see is that, actually, the meal at the fast food restaurant may not be that much more expensive than what it would cost you to make the same at home, particularly if you take into consideration the cost of your time.”
