The restaurant industry saw relatively strong sales and traffic in April driven by solid performances across all segments and strengthening both operator and consumer confidence, according to the latest NRN-MillerPulse survey.
MillerPulse, an operator survey exclusive to Nation’s Restaurant News, questioned operators from 66 restaurants in May regarding April sales, profit trends, performance and outlook. Respondents included operators from all regions of the country that represent the quick-service, casual-dining, fine-dining and fast-casual segments. Those surveyed in May represented restaurants that booked about 21 percent of industry sales.
Industry same-store sales rose 2.9 percent in April, an improvement from the 1.3-percent increase reported in March. When broken down, sales also rose 2.9 percent at both full-service restaurants, which include casual-dining and fine-dining brands, and quick-service restaurants, which include fast-food and fast-casual brands, the survey found. Easier sales comparisons helped the improvements, said Larry Miller, restaurant securities analyst at RBC Capital Markets and creator of the monthly MillerPulse surveys.
“The two-year trend in April was relatively unchanged, suggesting easier comparisons helped the month,” Miller said. “The good news is sales comparisons generally get easier for the rest of 2013.”
Sales were strongest at fine-dining restaurants, which reported a 5.1-percent increase, but all segments saw a positive uptick. Fast-food and fast-casual restaurants saw increases of 2.8 percent and 3.0 percent for the month, respectively. The casual-dining segment saw sales increase 2.5 percent, its strongest performance since January 2012. Industrywide guest traffic rose a modest 0.2 percent for the month, the first increase of 2013. Traffic increased at fast-food and fine-dining restaurants, though it dipped 0.1 percent at both fast-casual and casual-dining brands.
Surveyed operators were largely optimistic looking ahead, Miller said, with 82 percent saying that better sales trends would continue moving forward. Overall, operators across all segments — fast-food, fast-casual, casual-dining and fine-dining — said they believe sales will improve over the next six months.
“Operators overwhelmingly believe the better sales trend is sustainable,” Miller said, citing “easier comparisons, an improving economy and consumer, and their own corporate strategies.”
Consumers echoed operators’ sense of confidence, the survey found. While confidence was relatively unchanged in May, it remained at high levels and was higher than it was a year ago for both high-end and low-end consumers by 6 percent and 4 percent, respectively. Full-service restaurants in particular saw a positive swing in consumers’ future spending plans, with substantial increases reported at moderate and polished casual restaurants, as well as fine-dining establishments.
Miller noted, however, that restaurant operators should still expect possible challenges. Ninety percent of operators surveyed expected better sales trends in May, but for those that reported the first week of the month, sales looked flat, he said. However, they do expect commodity price pressures to continue to mitigate, and overall, Miller is optimistic looking ahead.
“The improving sales trends over the past two months coupled with easier comparisons and stable consumer sentiment bodes well for the remainder of 2013,” he said. “The tide appears to be rising, which, when combined with a more muted outlook for input costs, bodes well for restaurant company earnings.”
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Contact Charlie Duerr at [email protected].