Cheesecake Factory, Darden and Walmart: Winning the Kitchen-Table Economy

By Gavin Magor Reviewed by: Leo Tavolaro

If your grocery bill still makes you wince, you're in very good company.

About 9 in 10 voters said the cost of living was a crucial or major factor in Tuesday's vote for Congress.

That's the kitchen table talking.

Yet one of this year's best-performing stocks sells cheesecake.

Squeezed shoppers haven't stopped spending. They've changed where they spend, and that tells you where to put your money.

Who's still spending, where, and the stocks I'd own because of it.

Your Wallet Is Squeezed, Not Shut

About 6 in 10 voters said they were very concerned about the cost of food and groceries.

And about 8 in 10 said inflation had caused their household severe or moderate hardship.

In October, consumer sentiment stood at 48.0 on the University of Michigan's final reading for the month.

In October 2025, it stood at 53.6.

That's a gloomy mood by any measure.

At the pump, relief is arriving slowly.

The national average for regular gas was about $4.10 a gallon on Thursday.

That's down from $4.37 a month earlier.

But a year ago, the same gallon cost $3.08.

So you're paying less than last month, and still far more than last year.

When big purchases feel out of reach, people don't stop spending altogether.

They hunt for value on the essentials, and they protect a few affordable treats.

The companies that serve both habits well are taking market share right now.

Wall Street Bought the Checkout Aisle

On Wednesday, the Dow Jones Industrial Average had its best day since April 2025.

Walmart (WMT) gained about 3% that day.

Darden Restaurants (DRI) reached a new high.

At the same time, AI infrastructure stocks sold off.

For you, that rotation matters.

The market is starting to pay up for companies that win when household budgets are tight.

Restaurants face a tougher test than grocers.

Prices for meals away from home rose 3.5% over the 12 months to September.

Groceries rose just 1.8% over the same stretch.

Eating out is getting pricier faster than eating in.

Across casual dining, guest counts slipped 0.2% in the summer quarter, according to the Black Box benchmark Darden cited.

In other words, the average sit-down chain is standing still.

The winners are the ones pulling guests away from it.

I expect that gap to keep widening through the holiday season.

Is Cheesecake Too Bougie for a Budget Year?

It's a fair question.

The answer, in my view, is no.

Shares of The Cheesecake Factory (CAKE) have more than doubled this year.

That puts it among the year's top performers across the entire U.S. stock market.

The S&P 500 fund that tracks the broad market is up about 12% over the same period.

The business explains the stock.

Revenue topped $1 billion in the third quarter, a record.

Comparable sales at its namesake restaurants rose 15.2% from a year earlier.

Most of that came from more guests walking in the door.

Guest traffic rose 9.5%.

Higher menu prices added just 2.4%.

That's below the rate of inflation for restaurant meals.

Its traffic beat the casual dining industry by more than 9 percentage points.

Chairman and CEO David Overton explained the appeal on the Oct. 27 earnings call.

“Our broad, made-from-scratch menu allows us to respond to changing guest preferences and offer compelling choices across a wide range of price points.”

Bougie is in the eye of the bill payer.

A cheesecake dinner costs a lot less than a weekend away, and far less than a new car.

When the big treats are out of reach, the small ones get busier.

Guest counts don't jump like that on a niche crowd.

And the extra guests are helping profits.

The restaurant-level margin at its namesake brand rose to 18.7%.

Two More Ways to Play the Squeeze

Darden closed Wednesday at $230.61.

That topped its prior 52-week high, set in August.

It earns a Weiss rating of B, a BUY.

LongHorn Steakhouse same-restaurant sales rose 6.8% in Darden's latest quarter.

Olive Garden rose a more modest 1%.

CEO Rick Cardenas summed up the customer on the September call.

Consumers “are still spending. They're still resilient.”

For you, Darden offers steady growth from brands people already know and trust.

Walmart: More Visits, Not Bigger Baskets

Walmart closed Wednesday at $129.17.

It earns a Weiss rating of B-, a BUY.

U.S. comparable sales rose 2.6% in its latest quarter.

Transactions rose 1.5%, outpacing growth in the average ticket.

That's what a store looks like when it's winning new customers.

Walmart ran more than 11,000 price rollbacks during the quarter.

CEO John Furner said, “we continue to see growth from higher income households.”

When better-off shoppers trade down, Walmart gains either way.

Where Our Ratings Part Ways With the Rally

Not every consumer name that jumped on Wednesday earns our backing.

McDonald's (MCD) rose about 6.5% that day after its earnings beat.

It carries a Weiss rating of C-, a HOLD.

One good quarter doesn't make a BUY in our book.

The State Street Consumer Staples Select Sector SPDR ETF (XLP) is rated C+, a HOLD.

It's a fine place to hide.

But our ratings see more reward in the individual winners.

Let the Ratings Do the Sorting

Every fund rating in this report came straight from the live Weiss Ratings pages.

Weiss Ratings Plus puts that same work in front of you, with real-time ratings, instant alerts on upgrades and downgrades, and exclusive analysis.

It's how you'll know the day a long Treasury fund earns a better grade.

And it's how you'll see our next move on U.S. debt as soon as we make it.

Click here to see what Weiss Ratings Plus can do for you.

Back to the Cheesecake

So is The Cheesecake Factory too bougie for a budget year?

Our rating says the opposite.

It earns a Weiss rating of B+, a BUY, the highest of the stocks in this report.

The stock closed Wednesday at $115.39.

That's just shy of its 52-week high of $118.63, set Oct. 16.

Management plans to open up to 27 new restaurants in 2027.

That's more places to sell more cheesecake to more guests.

After doubling, the stock will have bumpy days.

But traffic like this is hard to fake, and harder to ignore.

I'd buy The Cheesecake Factory at market.

What I'm Watching

• Restaurant meal inflation cooling in the October consumer price index, due Tuesday, Nov. 10. That would help the chains keep their traffic edge.
• Walmart's transactions growing faster than its average ticket again when it reports third-quarter results, expected Nov. 19.
• The national average for regular gas falling below $4 a gallon before Thanksgiving.
• LongHorn staying ahead of Olive Garden when Darden reports on Friday, Dec. 18.

Bottom Line

If your grocery bill still makes you wince, follow where the squeezed shopper is spending.

Right now, that's Walmart for the basics and a few restaurants for the treats.

The Cheesecake Factory, rated B+, is my top pick of the group, and a BUY at market.

Darden, rated B, and Walmart, rated B-, are both BUYs as well.

The kitchen table has spoken. Your portfolio can listen.

Cheers!

Gavin