News

Q1 same-stores sales growth best since recession, study says

Dallas, Texas-based TDn2K, provider of workforce, sales and social data for the restaurant industry, reported that Q1 final results for its "Restaurant Industry Snapshot" data for March show same-store sales growth of 2.8 percent, the best for the industry since the recession.

April 13, 2015

Dallas, Texas-based TDn2K, provider of workforce, sales and social data for the restaurant industry, reported that Q1 final results for its "Restaurant Industry Snapshot" data for March show same-store sales growth of 2.8 percent, the best for the industry since the recession.

The study captured weekly sales from more than 20,000 restaurant units representing $48 billion in an annual revenue, the firm said. Same-store sales growth for the month of March was 0.8 percent, a significant drop from February's growth of 2.2 percent, a factor attributed to the unusually cold weather experienced throughout the country, according to a company press release.

"We continue to be optimistic about this new cycle of opportunity for the restaurant industry. For the first time since the recession, the industry has reported three consecutive quarters of same-store sales above 1.0% and the last two quarters have both been above 2.0% (also a first in over six years)," said Executive Director of Insights and Knowledge Victor Fernandez, for TDn2K, in a statement. "Though job gains slowed down during March and the unemployment rate remained at 5.5 percent, we believe our economy is already at full employment levels. Moreover, the unusually cold March experienced by many regions of the country may be an important factor behind the job growth slowdown, which hints at a recovery during April."

"Consumers also seem to share our optimism," continued Fernandez, "as shown by the rebound of consumer confidence in March after a small decline the previous month. Although the March and Q1 same-store sales growth results are somewhat obfuscated by the effects of the extreme winter conditions experienced this year, the economic foundation underlying the strong sales growth reported for Q1 supports the idea that the industry's growth goes beyond just having some relatively favorable weather conditions during the first half of the quarter. The clearest example of the strength behind the restaurant industry sales can be found when looking at the gap between the same-store sales growth reported for each of the last three quarters when compared with the growth rate reported for the same quarter a year ago. The gap in performance has been widening: the difference between the same-store sales growth rates for Q3 of 2014 and 2013 was 1.5%, while for Q4 it was 2.9% and it again increased to 3.6% for the first quarter of 2015."

TDn2K retained economist and President of Naroff Economic Advisors Joel Naroff said, "the outlook for the restaurant industry remains extremely positive. While the March jobs report was soft, rising job openings and low unemployment claims point to rebound in payroll growth. More importantly, wage gains are accelerating and the low energy costs are leaving more money in peoples' wallets. There is a lag between rising incomes and increased spending as households first put their financial houses in order. Then they start spending on those little things, such as eating out, they have given up. We should start seeing demand speed up by late spring."