Same-store sales increased 1.4 percent at casual dining chains in October, leading to restaurants’ best performance since February of last year, according to the latest MillerPulse index.
Overall, same-store sales increased 1.4 percent — the first positive reading since June.
“This is the first good month we’ve had all year,” said Larry Miller, co-founder of the monthly index of industry same-store sales.
Traffic, however, was still down. Same-store traffic declined 0.4 percent, a significant improvement from September’s 2.6 percent decline, but nevertheless the 27th month in 29 that same-store traffic fell.
Casual dining was the bright spot. Its same-store sales performance in the month was its best since September 2015.
And traffic in the sector was up 0.6 percent, the first time in 27 months that traffic was positive. It was the best same-store traffic performance for the sector in 33 months.
Hurricanes, ironically, provided some benefit. Miller estimated that 30 basis points of casual dining same-store sales could be attributed to a hurricane rebound — as consumers returned to restaurants that reopened following storm-related closures. Indeed, he said, Florida was the best market.
But the improvement was “broad based,” he said. “That’s probably the best number they’ve had in quite a while.”
Restaurant chains in recent earnings calls have suggested significant improvement in the month. Bloomin’ Brands Inc., owner of Outback Steakhouse and Carrabba’s Italian Grill, told analysts on its earnings call this month that all of its chains were positive in October.
Likewise, Applebee’s said it turned positive during the month, a dramatic improvement following a third quarter in which the DineEquity Inc. unit’s same-store sales declined by more than 7 percent.
Still, Miller cautioned that “one month does not a trend make.” Casual dining was going up against weak comparisons from a year ago, as a highly rated World Series and the election kept some people at home.
But he said that “some rationalization” in the casual-dining store base, meaning closures at chains with wait staff, could be having an impact on same-store traffic.
In addition, casual-dining chains have been active in working on to-go orders and delivery, which could help them regain some lost share. Darden Restaurants Inc.’s Olive Garden, Bloomin’ Brands, Buffalo Wild Wings Inc. and others have all been focused on improving takeout orders.
Meanwhile, quick-service chains’ same-store sales increased 1.4 percent, but their traffic declined by 1.1 percent. That was the 19th straight traffic decline, though it was the best performance since June 2016.
Miller described quick service as “OK,” adding, “They kind of maintained trend.”
Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze
