Edit ModuleShow Tags
Edit ModuleShow Tags

May Restaurant Data: No Summer Bonanza


Published:

In a monthly data dive from TDn2K, the sales and traffic mismatch continues through May. 

According to the research and analytics firms, comp sales continue to tick up slightly while traffic continues to fall. Positive momentum continues from last month, but just slightly. 

Comparable restaurant sales were up 1.09 percent in May, twice the three-month average of 0.53 percent and just ahead of the overall second quarter of 2018. But with little weather impact for the month, it’s not exactly a summery bonanza. And traffic is getting about the same. Through May, comparable restaurant traffic fell 2.11 percent, also slightly better than the three-month average of negative 2.55 percent and just ahead of the second quarter of 2018, when traffic fell by 2.70 percent. 

That mismatch means prices continue to drive much of the same-store sales. 

TDn2K reported that the Mountain Plains performed the best, with same-store sales of 3.33 percent and a minute traffic decline of 0.49 percent. The weakest market was Florida, which saw sales dip by 1.12 percent and traffic fall by 3.55 percent. 

But things are moving in the right direction, according to Victor Fernandez, vice president of insights and knowledge for TDn2K. 

“As we expected, May ratified that the relative strength continues for restaurants when it comes to sales momentum," said Fernandez in a press release. “What is even more encouraging for the industry was that in a month relatively free of external factors, such as winter storms and holiday shifts which have muddied the results in recent months, restaurants were able to post some encouraging sales growth.”

Joel Naroff, an economist for TDn2K, said macroeconomic jitters aren’t helping. 

“After growing strongly for nearly a year, the economy has entered a period of significant uncertainty, created by the escalation of the use of tariffs to include not just China, but also Mexico,” said Naroff. 

And with those jitters, consumer spending is all over the place as wage gains flatten and recent job-growth results have been lackluster. While this is likely not the inflection point cycle watchers are waiting for, things are slowing down. 

“The economy is not faltering,” said Naroff. “There is, though, less certainty that growth will be sustained at the strong levels seen recently. Indeed, the outlook is for the expansion to continue at a more modest pace. That should be enough to keep consumers spending, but again, not nearly as solidly as we have experienced this year—unless the trade uncertainties are resolved quickly.”

One major issue continues to be turnover. According to the firm, the restaurant industry continues to see historically high turnover rates and it continues to rise. More than half of the 31,000 restaurants in the data set reported increased difficulty recruiting and retaining quality employees. It’s gotten so bad that some locations have closed as a result. 

Wallace Doolin, co-founder and chairman of TDn2K, said that means focusing on culture and retention is more important than ever. 

“This requires an investment in winning the staffing challenges for great talent, retention of the best general managers and a culture of collaboration and genuinely caring about the balance of the employee, the guest and all stakeholders. That is how best-in-class brands drive positive traffic,” said Doolin. “The employees want to come to work, the guests want to come back and investors want to invest for growth.”

See more results at TDn2K

Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags


Covers everything from good news to bad judgment

About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is senior editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

Archives

Categories

Feed

Atom Feed Subscribe to the Franchise Times News Feed »

Recent Posts