Restaurant industry same-store sales softened across all segments in September, leaving operators cautiously optimistic that things will bounce back in October, according to the latest NRN-MillerPulse survey.
MillerPulse, an operator survey exclusive to Nation’s Restaurant News, questioned respondents from 47 restaurant operators in October regarding September sales, profit trends, performance and outlook. Respondents included operators from all regions of the country that represent the quick-service, casual-dining, fine-dining and fast-casual segments. Those surveyed in October represented restaurants that booked about 3 percent of industry sales.
In September, overall industry same-store sales rose 2.1 percent, falling from 2.8 percent in August. Quick-service restaurants, which include both fast-food and fast-casual brands, continued to be the industry’s top performing segment, but numbers still fell compared to August. In September, same-store sales rose 2.1 percent, down from 2.8 percent in August, which may be cause for concern.
“It was disappointing to see same-store sales soften further in September, especially so as all restaurant sectors fell relative to August,” said Larry Miller, restaurant securities analyst at RBC Capital Markets and creator of the monthly MillerPulse surveys.
In addition to unimpressive sales among quick-service restaurants, full-service restaurants, which include both fine-dining and casual-dining brands, had an especially rough month. Same-store sales rose 1.0 percent in September, falling from the 1.7-percent increase reported in August. Furthermore, casual-dining restaurants reported negative sales, -0.3 percent, for only the second time in the last two-and-a-half years. Slipping sales were not helped by industry-wide declining traffic, which rose only 0.2 percent in September, compared to 0.5 percent in August.
“With the weather and holiday shifts behind us now, this could be the true underlying trend,” Miller said. “And slower sales isn’t what we hope for.”
However, despite a disappointing September, operators are generally optimistic looking forward, the survey found. The outlook for the next six months remains positive across all segments, except for fine dining, and a net 36 percent of operators think that sales will improve in October compared to September. That number was calculated by subtracting the 13 percent of operators surveyed that think sales will worsen in October from the 49 percent that believe they will improve.
As commodity prices and the economy remain operators’ chief concerns, Miller believes that a mitigation of these challenges is on the horizon, which accounts for operators’ cautiously optimistic outlook.
“Operators are most concerned about commodity inflation and the uncertainty in the economy,” he said. “Both will clear themselves up soon, and we think the resolution will be positive catalysts.”
He went on to note that operators' outlook on the future has been relatively accurate in recent months. “The best news in the report is operators' optimism that sales will rebound at both quick-service and full-service restaurants in October,” Miller said. “They correctly called the last five months, so I am hopeful they are right about October, too.”
Register for MillerPulse at www.nrn.com/industry-insight.
Contact Charlie Duerr at firstname.lastname@example.org.