Restaurant industry same-store sales fell again in August, according to the MillerPulse index, as consumers continued to explore other dining options.
Same-store sales fell 0.5 percent during the month, according to MillerPulse. That was the fourth straight monthly decline — the first time that has happened in the post-recession era.
But traffic has been the real issue. Same-store traffic fell 2.2 percent, the third straight month in which traffic fell more than 2 percent.
While both same-store sales and traffic were stronger than in July, they were not figures to celebrate. In fact, same-store sales on a two-year basis were actually weaker in August, rising 1.6 percent, compared with a 1.9-percent increase in July.
“Nothing is getting better,” said Larry Miller, co-founder of the MillerPulse index.
Miller was in fact more pessimistic about prospects for the year, and suggested that same-store sales would be flat this year. That’s a stark contrast to the 3-percent growth from the previous year.
“That’s a very big gap,” Miller said. “That’s a pretty serious change in a period of 12 months.”
But industry traffic has been weak for some time. This summer’s problems have only made things worse. Traffic has been down 33 of the past 45 months, according to MillerPulse. That includes each of the past six months, and 10 of the past 11 months.
In other words, consumers are simply not going out to restaurants like they once did.
The good news for restaurant executives is that they’re not alone. Same-store sales fell in both quick service (down 0.1 percent) and casual dining (down 0.9 percent). Traffic declined at both segments, too, with the number of customers falling 1.4 percent at quick service and declining 2.9 percent at casual dining.
Several restaurant operators have lowered expectations for same-store sales this year on the weakness.
“It’s broad based,” Miller said. “It’s not like you felt like these guys are taking share from this group. The water table is dropping, and all of the boats are going down with it.”
So, why this summer? Many observers have suggested that a decline in grocery prices, compared with an increase in restaurant menu prices, have hurt the industry.
Two other things have happened, too. Some consumers might have simply stayed home to watch the Olympics this summer. That could explain corresponding strength at, say, pizza chains that deliver food directly to homes.
Another reason could be the presidential election.
“People are not sure about the future,” Miller said. “Businesses may be waiting to spend to see what’s happening so they could figure out the tax ramifications. Things could be on hold a little bit until after the election.”