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MillerPulse: Restaurant sales turn positive

Led by quick-service segment, industry ends its losing streak

Thanks largely to quick-service concepts, the restaurant industry ended a six-month losing streak in November, as same-store sales increased 0.3 percent according to the latest MillerPulse survey. 

It was the first increase since April and ended the longest growth drought since 2010 when the MillerPulse survey began.

Yet November was still weak.

“This is not an inflection point,” said Larry Miller, cofounder of the monthly index. “It was a better month. But it still wasn’t a strong month in total.”

“This is just a move up in a down trend,” he added.

All of the improvement came at quick-service restaurants, where same-store sales increased 1.3 percent. Traffic in the sector still fell, by 0.3 percent, but that was the lowest rate of decline since March.

Casual dining, meanwhile, remained problematic. Dine-in concepts saw their traffic decline 3 percent, worse than either of the past three months, while same-store sales declined 0.8 percent. 

The 2.1 percent spread between quick-service and casual-dining restaurants was the year’s worst.

“The traffic numbers I’m seeing in casual dining are frightening,” Miller said.

“That may be a function of the lack of investment made in casual dining over the years, improving the overall experience. Maybe that’s coming home to roost. Maybe it’s a function of the younger generating and the way they’re eating.” 

On a two-year basis, same-store sales increased 1.7 percent, a slight improvement from October. But same-store sales increased 3.8 percent over two years at quick-service restaurants, while they fell 0.5 percent over two years at casual dining.

November’s improvement could suggest that consumers grew at least modestly more confident following the election, as the uncertainty that had dominated the country in the weeks leading up to it passed. 

Miller, however, doubts that the reason. He said that one of the explanations for the election-related weakness is that people didn’t want to gather together out of fear of talking politics.

Divisions remain, however. “People are still sore,” he said. “Some people are happy. I think you’d see more of a pickup in casual dining if people were more willing to venture out.”

That doesn’t mean Miller is pessimistic heading into 2017.

“I’m really hopeful,” he said. “I think we’re past the election. Unemployment is low. The economy is a little more stable. There are easier comparisons next year, negative comparisons.

“It should be a better year next year.”

Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze

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