Same-store sales increased 0.5 percent in June, according to the latest MillerPulse index, as industry sales started to recover following a year of weak performance.
But traffic continued to fall. Traffic declined 1.8 percent in the month, and dropped 3.7 percent on a two-year basis. The June traffic decline was the industry’s best performance since April 2016.
“They were better,” said Larry Miller, co-founder of the index. “They were not great, but they were better. But we’re still a good way from flat traffic.”
Same-store sales have been slowing since they peaked at 5.3 percent in January 2015, finally turning negative in June 2016. Much of the reason for the same-store sales increases in May, of 0.3 percent, and June was due to easier comparisons.
That should keep sales positive for much of the year, and same-store sales should finish the year with a slight increase, Miller said.
“It has more to do with easier comparisons than business getting better,” he said. “But traffic is still negative.”
Same-store sales June were better at casual-dining restaurants than at quick-service restaurants.
Casual-dining restaurants generated 0.7-percent same-store sales growth in June, while quick-service same-store sales increased 0.2 percent. It was the second time in three months that casual-dining chains outperformed quick service.
Before April, casual-dining chains had only outperformed quick-service concepts once since 2011.
Similarly, quick-service traffic fell 2.4 percent in June. By contrast, casual-dining traffic declined 1.1 percent.
But that doesn’t mean casual dining is out of the woods. On a two-year basis, casual-dining same-store sales decelerated, and fell 0.9 percent in June. By comparison, quick-service same-store sales increased 0.1 percent on a two-year basis.
“They’re benefitting from having easier comparisons,” Miller said.
Casual-dining sales are “stabilizing,” but he expected them to show some renewed weakness in the coming months.
Still, the industry appears to have bottomed out from its worst period since the recession. Same-store sales had fallen in 10 of 11 months through April, and traffic averaged a decline of 2.7 percent over the period.
The industry will begin comparing itself to the worst months of that period in the coming months.
“This is definitely a glass-half-full picture,” Miller said. “Things are stabilizing. There are easier comparisons ahead. People feel a little bit better. And you can see some spending kick in toward the end of the year and continue into 2018.”
Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze
