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A look at industry same-store sales

Nearly all public restaurant companies reported fourth-quarter same-store sales results this month, and winter storms and lingering economic pressures pushed most into negative territory. Some, mainly because of value messaging, moved in a positive direction.

For the fourth quarter, or the quarter ended closest to December for companies on a non-calendar fiscal year, quick-service chains on average posted a larger same-store sales decline than any other restaurant industry segment. Quick-service chains were hurt by rising unemployment as well as comparisons with a year earlier when sales trends for fast food were still stable. Casual-dining chains still struggled for customer traffic in the fourth quarter, but some same-store sales results did ease from a year ago. On average, pizza chains and coffee and snack brands were able to post positive same-store sales in this harsh environment, while the fast-casual segment, which is typically the fastest-growing segment, posted, on average, a same-store sales decline of 0.8 percent. That was mostly driven by a double-digit drop of 11.9 percent at Cosi.

The averages were based on all chain reports for the latest quarter, including international operations.

Click here for a complete look at restaurant same-store sales results.

Quick service: Average segment same-store sales result: -4.7%

The segment finally started to take some hits from the recession. Arby’s fourth-quarter same-store sales were down 11 percent at North American stores compared to a year ago, while Wendy’s North American comps declined 3 percent.

While Wendy’s fourth quarter numbers were down, the company said its 99-cent spicy chicken nuggets and new fish sandwich helped sales jump 0.3 percent in January to open the first quarter.

Arby’s said its January corporate same-store sales improved, declining 7.4 percent, as it rolled out its $1 value menu to more than 2,500 restaurants.

Sonic blamed severe winter weather for systemwide same-store sales that dropped 12 percent to 14 percent in the second quarter. The Oklahoma City-based company said nearly two-thirds of the decline can be attributed to record snowfall around the country, including Texas and Oklahoma, where more than a third of the chain’s restaurants are located.

Casual dining: Average segment same-store sales result: -4.2%

Buffalo Wild Wings continued as a top performer in the segment, with most of its competitors mired in negative territory. And the 658-unit chain should keep its momentum going throughout the first quarter with the Super Bowl, the Winter Olympics and the NCAA men’s basketball tournament all falling in that time frame.

"The excitement of the Super Bowl, one of our biggest sales days, is still buzzing as we transition into the Winter Olympics and begin gearing up for the college basketball tournaments,” chief executive Sally Smith said. “We'll debut a new menu and a new TV spot.”

Fast casual: Average segment same-store sales result: -0.8%

Panera's same-store sales increased 7.4 percent in its fourth quarter and the positive trend continued with an 8.4-percent jump during the first six weeks of the first quarter. Chipotle and Pei Wei Asian Diner also notched positive comps for the fourth quarter.

Pizza: Average segment same-store sales result: 1.8%

With its new pizza recipe, Domino’s is looking to build on its 1.4-percent same-store sales jump in the fourth quarter.

“Traffic growth was the most significant in the fourth quarter; and this positive momentum has continued thus far in 2010, as sales and traffic have increased significantly since the launch of our new core pizza,” said chief executive David Brandon

Family dining: Average segment same-store sales result: -2.7%

Family-dining chains struggled across the board, with the exception of Steak n Shake, which saw same-store sales jump 14.4 percent in the fourth quarter. Frisch's Big Boy corporate stores saw same-store sales decline 0.4 percent, and Crack Barrel Old Country Stores recorded a 0.2-percent drop, versus last year.

Of the larger family chains, Denny’s same-store sales performance was the most dismal, with declines of 6.1 percent at company-owned units and 7.2 percent at franchised stores. Recent shareholder unrest aimed at unseating Denny’s chief executive point to a company in distress.

Attempting to drive traffic, Denny’s has looked toward free or lower-priced promotions, including its Grand Slam Giveaway and tests of a new menu called Right on the Money, which features a selection of 15 items priced at $2, $4, $6 or $8. Denny’s began testing it in January in six U.S. markets mostly in the West.

In an annual letter to shareholders, Steak n Shake chairman Sardar Biglari said 2009 was a great year for the chain, which focused on cutting costs, developing value for customers and improving service.

"If fiscal 2008 was annus horribilis, and it was truly horrible, then, by contrast, fiscal 2009 was annus mirabilis, or a miraculous year," Biglari said in the letter. "2009 was a year marked by the reversal of the decline in customer traffic that had been troubling Steak n Shake over most of the last decade as well as a welcome reversal of operating losses that started in late fiscal 2007."

Contact Mike Dempsey at [email protected].

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