Restaurant industry sales “snowed under” in January after good Q4

Volatile weather, cold and snow can negatively impact restaurant sales and this winter is no exception.

According to industry tracking firm TDn2K, U.S. restaurant same-store sales fell 0.3% in January. New England restaurant sales suffering the biggest decline at -2.3%.

The worrisome part of this report is that restaurant traffic, the most important component of sales, fell across the U.S. by -3.0% during January and followed three months where sales were either positive or flat.

Let’s hope tax cuts will boost consumer confidence and offset fears about the rocky stock market. We need a boost to restaurant traffic to regain momentum in February.

The TDn2K report comes right after we heard that the country’s largest restaurant chains surged in the fourth quarter, salvaging what was an otherwise slow year overall for the industry.

A Technomic Chain Restaurant Index report said sales at the 200 largest restaurants grew 4.4% in the last three months of the year, helping those chains grow by 2.4% overall in 2017.

“Consumer confidence at the end of 2017 was very high,” said Sara Monnette, vice president, innovation with Technomic. “Consumers were feeling optimistic about the end of the year and their outlook going into 2018 was strong, particularly in light of the passage of tax cuts that would put more money in their pockets. Retail holiday sales were also strong the last few months of the year — and when people are out shopping, they are undoubtedly using restaurants as well.”

Here are some details from Technomic:

  • Chains specializing in breakfast (think McDonald’s and Dunkin’) and with lower check averages (quick service) saw 8.5% sales growth in the last three months of the year and 2.2% growth for the full year.

  • Casual-dining chains (Applebee's, Chili's, Bravo Brio) continued losing customers and sales despite a broad improvement in the industry toward the end of 2017 — though the rate of decline slowed. Sales at casual-dining chains declined by 0.7% in the fourth quarter, and by 2.6% for the year.

  • Total casual-dining traffic declined by 3.2% in the fourth quarter, and 4.9% for the full year.

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