The restaurant industry’s strong monthly same-store sales in December carried into January driven by favorable weather and solid traffic trends, according to the latest NRN-MillerPulse survey.
January same-store sales rose 4.9 percent, and while they dipped slightly compared to the 5.4-percent increase from the prior month, they represented a significant increase compared to the same month last year when same-store sales rose 1.7 percent, the survey found.
MillerPulse, an operator survey exclusive to Nation’s Restaurant News, included respondents from about 60 restaurant operators in February regarding January sales, profit trends, performance and outlooks. Respondents included operators from all regions of the country and represent the quick-service, casual-dining, fine-dining and fast-casual segments. Those surveyed in February represented restaurants that booked about 15 percent of industry sales.
“January was another strong month also helped by weather,” said Larry Miller, restaurant securities analyst at RBC Capital Markets in Atlanta, and creator of the monthly MillerPulse surveys and research. “The question is how sustainable are sales going forward, and my sense is that they are more sustainable than we thought possible several months ago.”
Quick service, which includes both fast-food and fast-casual brands, was the highest-performing segment in January, reporting a 6.1-percent increase in same-store sales, matching the recording-setting month the category booked in December. Full-service restaurants, which include both fine-dining and casual-dining brands, also performed strongly with a 3.8-percent increase in January, down slightly from the 4.2-percent increase in December.
Miller’s optimism on positive sales trends for the months ahead was echoed by a majority of operators who are predicting that February sales are going to better than those in January. A net 31 percent of operators surveyed felt that despite strong January results and favorable weather conditions, February sales were going to be even stronger. This number was calculated by the 48 percent of operators surveyed that thought February sales would be stronger minus the 17 percent that believes that February sales would be worse than in January.
“We’re also seeing healthier behaviors from the consumer lately,” Miller said. “This includes a strengthening average check, increasing spending plans at restaurants in the future and stronger job growth and improving confident, particularly on the low end.
The survey found that guest traffic rose 2.9 percent in January, and that average check increased 1.9 percent in January, an all-time high in the NRN-MillerPulse Survey, Miller noted.
However, restaurant margin outlook continues to be dampened by high commodity costs and a net 9 percent of operators surveyed in February expect restaurant margins to contract over the next six months, up 3 percentage points from the net 6 percent of operators who felt the same way when surveyed in January.
According to the February survey, operators forecast 2.4 percent inflation in 2012, with pricing of 1.6 percent over the next six months.
Contact Charlie Duerr at [email protected].