After seeing strong same-store sales increases from December through February, March may bring a downward trend for restaurants in the casual-dining sector — possibly the worst since December 2010, according to an analyst report Thursday.
Mark Kalinowski, a restaurant securities analyst for Janney Capital Markets, cited unnamed industry sources who predicted that March same-store sales for casual dining in aggregate have the potential to be negative.
Kalinowski previously projected that same-store sales would be flat in March, or rise as much as 1 percent. “Now the segment apparently needs to regain some momentum just to reach flat,” he wrote.
By March, the year-over-year benefit of an unusually mild winter disappeared, Kalinowski said. Results may not only revert to the “anemic” levels of October and November of last year, they may end up even worse, he said.
Earlier this month, another securities analyst, Larry Miller at RBC Capital Markets, reported that industry sales trends had held up through February but that operators were cautious on March results.
Most industry watchers predict a solid year for restaurant sales, especially as recent data points have pointed to improved consumer sentiment and a better unemployment picture.
Kalinowski noted that same-store sales trends in the quick-service sector are holding up.
McDonald’s appears poised to report solid same-store sales for March, he said, and his sources indicate “good things” for Starbucks, Chipotle Mexican Grill, Taco Bell and KFC.
Burger King officials have also indicated that they expect positive results in the first quarter.
Casual-dining chains are facing challenging sales trends with continued new menu news:
P.F. Chang’s China Bistro is scheduled to roll out 13 new dishes on Monday. The Scottsdale, Ariz.-based chain is promoting the items on Pinterest.
Among the new additions are lemon-scented Brussels sprouts, Vietnamese crab salad, caramel mangoand Chinese five spice duck.
The Roy’s restaurant chain, owned by Tampa, Fla.-based OSI Restaurant Partners LLC, this week launched a new three-course spring prix fixe menu priced at $36.95 per person, with varying options. On Mondays, guests can choose any three courses from the full menu at the prix fixe price.
And The Cheesecake Factory earlier this month rolled out 14 new dishes for its spring menu, including new additions to its popular SkinnyLicious line, which are all under 590 calories.