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Dining at restaurants is a discretionary expense for most consumers. When the economy strengthens, restaurants tend to benefit from an uptick in customer traffic and higher average meal tickets. However, when economic growth weakens, consumers tend to spend more money buying food to prepare at home or dining at cheaper fast-food restaurants.

Since oil and gasoline prices began to drop last summer, spending on food consumed outside the home has climbed to almost 5.9 percent of total average expenditures, up from last summer’s low of 5.65 percent.

(Click graph to enlarge.)

Restaurant stocks have also outperformed, with the S&P Supercomposite Restaurants Index generating a 12.5 percent total return so far this year, topping the 6.6 percent gain posted by the S&P 500 Consumer Discretionary Index.

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