Retail and Restaurant First Quarter Review

We have closed out the month of March and with it the first quarter has come to an end. It is the perfect opportunity to take stock of what the year has provided and what still needs to be done. Public companies will be reporting their first quarter financials in the next month, and we will have a clear indication of where the year is headed.

If we look back to 2023, the first quarter was positive if not particularly strong for most major chains. Positive results from the likes of Amazon, Target, McDonald’s, and RBI had many hopeful that sales would continue to trend in a positive direction. While these companies and many others posted positive revenue at the end of 2023 it was not a smooth journey.

It is expected that most major retailers and restaurants will post positive first quarter profits. After looking back at last year, we shouldn’t let these numbers mislead us into thinking this will be an easy year with more record-breaking profits. Inflation has cooled off, yet prices haven’t come back down and are still increasing in some industries. Restaurants in particular are still struggling with pricing and have faced public backlash over current and future increases.

Increased prices have helped make quarterly sales numbers, yet traffic continues to be a problem. Last year showed that the right sales, like Black Friday, will still convince consumers to spend on luxuries and essentials, yet those sales have to be well timed and communicated to consumers. Retailers cannot rely solely on sales to get them to their financial goals and have still faced challenges this year in bringing value that customers want every month.

Tepid first quarter results could also be the product of an election cycle that is starting to heat up. The 2024 presidential election looms over every financial decision for companies and customers alike. The uncertainty of what could change during this election has pushed consumers to hold onto their money until they have a clearer picture.

As we move into April, companies will begin ramping up plans to ensure that their remaining quarterly financials meet expectations. Executives that have been put in place over the last few months will be looking to seize new opportunities, opening the door for new suppliers. Record revenue is still possible for 2024, yet the time to meet those goals is short.