Meanwhile, restaurants may also enjoy wider margins as costs fall along with commodity prices. Over the second quarter, food costs on average were 15% lower year-over-year, the fourth consecutive quarter of double-digit deflation compared to the previous year-ago period.
Related: Lower Food Costs May Boost Restaurant ETF This Earnings Season
Investors can capitalize off the growing industry through a sector-specific option, the Restaurant ETF (NasdaqGM: BITE), a dedicated restaurant-related ETF. The ETF includes exposure to many eateries, with top components including Arcos Dorados Holdings (NYSE: ARCO) 3.0%, Dave & Busters (NasdaqGS: PLAY) 2.9%, El Pollo Loco (NasdaqGS: LOCO) 2.9% and Dominos Pizza (NYSE: DPZ) 2.6%.
BITE also equally weights components so the fund may have a larger tilt toward smaller companies.
“An equal-weighted approach helps to minimize the outsized impact that a few mega-cap restaurant operators can have on more traditional, market cap-weighted indexes,” according to BITE. “For example, under BITE’s methodology, small but faster-growing companies like The Habit Burger and Shake Shack receive the same weighting as a global giant like McDonald’s.”
Financial advisors who are interested in learning more about the consumer services industry can register for the Tuesday, July 19 webcast here.