Restaurants, along with the whole of retail, faced a tough September.
“What happened was September. It was fine until September, everything was fine,” said Larry Miller, co-founder of MillerPulse, a restaurant data and information service.
“It was a baffling, baffling September,” Miller continued.
The industry saw a three-week downturn at the end of the month, putting a damper on growth for the quarter.
Industry same-store sales in the third quarter were up 1.1 percent year over year, but that indicated slowed momentum from the second quarter when same-store sales increased 1.4 percent. Industry traffic — which has seen declines in every quarter since early 2015 — was down 1.5 percent, slightly worse than the quarter before as well.
Quick-service sales, which had held up reasonably well, softened in the third quarter. Same-store sales for the segment were up 1.5 percent in the quarter, slightly less than the 1.9 percent gain the second quarter. QSR traffic was down 1.5 percent for the quarter, the 10th straight quarter of year-over-year declines.
Miller hasn’t found an apparent cause for the September slowdown. Weather wasn’t the problem as Hurricane Florence wasn’t as impactful to the industry as Hurricane Irma, which was about the same time last year and was “helpful” in comparison. Gas prices? They’ve been in the same range they’ve been in since May. Economic woes? Miller said that wasn’t it either as job growth is strong and confidence high. Political fighting doesn’t seem like anything new, said Miller. Although, the timing of the Ford-Kavanaugh hearings coincided with the downturn.
“Wouldn’t that be interesting if it was [the Ford-Kavanaugh hearings]?” Miller asked. “Our view is there has been divisive political noise for much of the past two years, so why would Kavanaugh be different but who knows.”
Now for a bit of good news.
Early numbers for October are looking better.
“Maybe it was an aberration,” Miller said. “That's what October is suggesting so far. Maybe it was just collectively people were not going out for a couple of weeks, and now they resumed."
Contact Gloria Dawson at [email protected]
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