sales low

Report: Same-store sales hit three-year low

Continuing traffic decline vexes restaurant industry, MillerPulse survey finds

Same-store sales fell 0.6 percent in October in the worst performance for the restaurant industry in more than three years, according to the latest MillerPulse survey.

Same-store sales were weak for both the quick-service and casual-dining segments.

Quick-service same-store sales were flat in October, the worst performance for the segment in at least five years. 

Casual-dining restaurants continued to donate sales. Same-store sales in the segment fell 1.4 percent, the worst performance this year for the struggling segment, and its worst performance since 2013.

The biggest problem was traffic. Overall traffic fell 2.2 percent for the second straight month. Same-store traffic fell 2.8 percent at casual-dining restaurants, the 16th straight month of declines for the segment, and the 19th decline in the past 20 months.

Quick-service traffic fell 1.7 percent, the seventh straight month of declines for the segment. 

“The malaise continues,” said Larry Miller, co-founder of the MillerPulse survey. “Traffic was very, very soft and has been soft for quite a period of time. And it’s not just soft for one segment; it’s soft for everybody.”

Miller said the presidential election could have pulled sales down this year, and he noted that the savings rate of 5.8 percent suggests consumers are skittish and holding off on spending.  

Miller said the wide price gap between grocers and restaurants remains a major factor in this year’s depressed same-store sales at restaurant chains. 

In September, food-at-home prices fell 2.2 percent. Food-away-from-home prices increased 2.4 percent. That marks a 4.6-percent difference in price between grocers and restaurants, which could be giving more consumers a reason to eat at home.  

“I still believe it’s a large, contributing factor,” Miller said. “Elections might be having some impact. But when you look at the continued decline of pricing for grocery, it has been going down. And then you see the continued decline in sales. There’s a pretty clear relationship between the two. Maybe it’s not the only factor. But it’s definitely a factor.”

Restaurant industry sales have been rapidly deteriorating all year. Two-year same-store sales peaked at 6.2 percent in January, according to MillerPulse. They had been falling nearly every month since then. In October, two-year same-store sales increased 0.8 percent, the worst performance for that number since at least 2013.

For quick-service restaurants, same-store sales increased 2.7 percent on a two-year basis, which seems strong, but still represents a multi-year low. For casual dining, same-store sales have fallen 1.2 percent on a two-year basis.

Mller said sales will continue to be weak in the fourth quarter, and he doesn’t believe they will improve in the first quarter. 

“It’s just less people coming in the door,” he said.

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

TAGS: Finance
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