Despite a decline in guest traffic, restaurant industry same-store sales were stable in December thanks to strong performance from fine-dining restaurants, according to the latest NRN-MillerPulse survey, but consumers are wary looking ahead.
MillerPulse, an operator survey exclusive to Nation’s Restaurant News, questioned operators from 42 restaurants in January regarding December 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 January represented restaurants that booked about 3 percent of industry sales.
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Overall, industry same-store sales remained flat in December, increasing 2.1 percent, the survey found. The biggest surprise came from the performance of full-service restaurants, which reported a 2.1-percent increase in same-store sales in December.
For the first time in nearly a year and a half, sales at full-service restaurants, which include both fine-dining and casual-dining brands, were the same as they were at quick-service restaurants, which include both fast-casual and fast-food. Quick-service brands also reported a 2.1-percent increase in sales in December, falling from the 2.7-percent increase in November.
The improved performance from the usually struggling segment was largely driven by the surprisingly strong sales at fine-dining restaurants, noted Larry Miller, restaurant securities analyst at RBC Capital Markets and creator of the monthly MillerPulse surveys. “I think consumers were tired of being frugal and treated themselves a bit during the holidays,” he said.
Despite splurging in December, however, consumers are expected to tighten their wallets moving forward. The survey saw one of the sharpest drops in future restaurant-spending plans in its history, Miller said. Over the next 90 days, consumers plan to visit restaurants at the lowest frequency since February 2009, and plan to spend less on main meals when they do decide to eat out.
“The consumer giveth and the consumer taketh away,” Miller said. “The large drop in consumer spending plans was the other big shocker in December.”
As a result, a net 24 percent of operators expect sales to be worse in January than they were in December. That number was calculated by subtracting the 11 percent of operators surveyed who think sales will improve in January from the 35 percent that think they will worsen.
However, operators remained reasonably optimistic, the survey found. For the next six months, operators’ same-store sales outlook was positive across all four segments — fast food, fast casual, casual dining and fine dining.
“Restaurant are ready for a tough month, but they're generally expecting better same-store sales over the longer term,” Miller said. “Consumer spending plans don't align with the operator outlook, but the good news is the consumer can be fickle. Lets hope that's the case here.”
Register for MillerPulse at millerpulse.com
Contact Charlie Duerr at charles.duerr@penton.com.