Same-store sales rose just 1 percent in January, according to the latest MillerPulse index released this week, in what was the worst one-month report in nearly two years.
And yet Larry Miller, cofounder of the monthly survey, considers that a good result. Comparisons were difficult, after all, and the month included a major east-coast snowstorm in the middle of it.
“It was a good month,” he said. “Same-store sales probably should have been negative. The comparison was so difficult to last year that the actual, underlying trend was a lot stronger than what the chart says.”
Indeed, on a two-year basis, same-store sales grew 6.3 percent, the best result in several years. Two-year sales numbers factor out one-time sales surges or declines based on weather or other factors.
January 2015 was the strongest month for the restaurant industry in recent memory, as consumers flocked to eateries that month thanks to low gas prices and good weather. The 1 percent growth this January suggests the industry kept those sales.
Many observers expected a weak month heading into January given these conditions. “It shouldn’t be a surprise to people” that sales weakened, Miller said.
The snowstorm didn’t have as big of an impact as many people might think, Miller noted. “In Week 3, when weather was bad, clearly sales and traffic were bad,” he said. “But it snapped back pretty good in Week 4.”
Same-store sales were particularly weak at quick-service restaurants, which reported just 0.2 percent growth, the weakest result for that sector in at least several years. The casual-dining segment, in fact, outperformed quick-service chains by 1.6 percentage points, thanks to its 1.8 percent growth.
Casual dining also outperformed quick-service restaurants on a two-year basis, 6.5 percent to 6.1 percent.
Traffic was harder for dine-in concepts to come by. Traffic fell 1.5 percent at casual-dining restaurants while quick-service chains’ traffic fell 0.8 percent — combined, traffic fell 1.1 percent.
So casual dining had fewer customers, but they spent more money.
“It’s pretty clear we’re getting better check growth at casual dining,” Miller said. “Either [companies had] successful promotions in the period that built check or people are spending a little more.” He noted that sales of alcohol and appetizers were both up solidly during the month.
“Maybe people are tired of those discounts at QSR,” Miller added.
Contact Jonathan Maze at [email protected].
Follow him on Twitter: @jonathanmaze
