News

Restaurant sales growth weak despite February improvement

Chain restaurants posted positive same-store sales growth of 0.4 percent in February after a slow January.

March 14, 2016

Chain restaurants posted positive same-store sales growth of 0.4 percent in February after a slow January, according to a TDn2K's Black Box Intelligence report. Still, the lackluster growth rate may signal that consumer spending in restaurants has slowed. The average growth rate reported for the five months since the beginning of Q3 last year has been 0.1 percent, the report stated.

This insight comes from data reported by TDn2K's Black Box Intelligence through The Restaurant Industry Snapshot, based on weekly sales from over 23,000 restaurant units, more than 120 brands, representing $57 billion dollars in annual revenue.

Industry sales were strong a year ago, however. February 2015 is tied with June 2015 for the best month of same-store sales growth (2.3 percent) out of the last 13 months, the report stated. Same-store sales growth on a two-year basis was approximately 2.7 percent in February due to an increase of almost 5 percent in average guest checks.

Additionally, February's same-store traffic growth was -1.3 percent during February — an improvement of 1.8 percent from January and the best traffic performance since September 2015, according to the report. Average guest checks, however, increased only 1.8 percent during February, which is the lowest increase in almost two years. Brands may be relying more on price promotions to address consumer dining patterns, the report stated.

New England was the best performing region in February based on same-store sales growth. The slowest region in February was Florida.

Job growth

The number of restaurant employees increased by 4 percent year-over-year in January, the report stated. Also, restaurant employment growth has been stronger than overall job growth in the economy, averaging 3.6 percent over the last year. Additionally, restaurant job growth has accelerated since August 2015, with net growth of 4.3 percent.

Manager and hourly employee staffing levels continue to challenge restaurants. The trend of rising manager turnover, which started in 2010, increased again in January, the report stated. The hourly employee turnover rate remained flat during January. However, in many cases the turnover rates currently reported by restaurants exceed 100 percent and are a cause for concern, the report stated.