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Survey: Restaurant traffic up, average check down

The new NRN-MillerPulse survey provides sales trends, operator outlook

The latest MillerPulse survey, which tracks operator sales and sentiment, showed an increase in guest traffic for all segments and all dayparts in April, but hinted at reduced consumer spending as more value-focused purchases led to an average check decline.

MillerPulse is a monthly survey jointly produced by Nation’s Restaurant News and Larry Miller, the restaurant securities analyst at RBC Capital Markets in Atlanta. Miller has been producing this industry benchmark report for more than two years. NRN now offers its readers the chance to participate and receive the exclusive data each month.
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The month-to-month look at industry same-store sales shows a roughly flat result in April, with comps up 2.7 percent, compared with a 2.8-percent uptick in March. Looking year-to-year, the April same-store sales result followed a positive 0.8 percent in April 2010.

All five dayparts showed positive guest traffic trends, according to the survey, but the majority of operators reported a decline in average check — the first such drop in 18 months.

“Overall we’re seeing a pretty good trend,” Miller said, “but we’re in one of those periods where things are really unclear. Will the decrease in check be an issue in three to five months? We don’t know.

“There could be a large storm cloud forming,” he added, “but it could also dissipate.”

The latest survey was collected in mid-May, covering April results, and included responses from 125 operators from major chains and regional brands that in aggregate represent about 20 percent of total industry sales. Respondents cover all restaurant segments and all geographic areas in the United States.

The decreased average check in April reflected an increase in value-specific entrée purchases, as well as decreases in beverage and appetizer incidence. Miller said this most likely reflects a consumer trying to manage spending as inflation, especially for gas, continues to rise.

Looking into May, most operators expect improved same-store sales trends, with 49 percent of respondents saying they expect May to be better than April. Quick-service respondents were more optimistic, as 59 percent said they believe May will be better than April. About 40 percent of full-service operators expected a month-to-month improvement in May, while 47 percent expected a flat result for May.

Additional takeaways:

• Commodity inflation is a top concern. A full 70 percent of operators expect higher food costs over the next six months, with inflation hitting about 2.4 percent.
• Margin contraction is expected over the next six months. Comparing expected results to last year, 37 percent of operator respondents said they expect worse margins during the next six months.
• Pricing is expected to help alleviate inflation concerns and margin pressure. The survey showed that operators expect to run a positive 1.8 percent pricing rate over the next six months.

Contact Sarah Lockyer at [email protected].
Follow her on Twitter: @slockyerNRN

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