Statistics for the first third of the year were not great for restaurants, and while there was a slight rebound from 2016, the industry is still under heavy pressure.
For the first quarter, same-store sales sank 1.6 percent, the fifth straight quarter of negative results, according to research firm TDn2K. That hasn’t happened since the Great Recession.
In April, comp sales were down another 1 percent. Traffic through the first four months of the year was abysmal, down 3.6 percent in the first quarter and another 3.3 percent in April.
As those TDn2K numbers—which cover many chains— were released, so were numbers from the Census Bureau. Those showed growth of 0.4 percent, bringing April foodservice sales to $56.6 billion. Through the first four months of the year, census numbers show 4.5 percent sales growth over last year. Comparing same-store sales to overall sales is not perfect, but it shows that people are eating out more—just not at chains.
A survey from research firm Pentallect has a clue to that disconnect that applies not just to restaurants but all franchised brands. In a recent survey, respondents named independent operations superior to chains in 12 of 15 categories from “community-oriented,” “value for money” and “shares my values.” That’s a distressing bit of clarity into the local, craft trend for the entire franchise industry.
“This combined set of favorable attributes represents a significant advantage for well-managed independents,” said Pentallect’s President Rob Veidenheimer, but is a “major challenge for chains.”
Some good news: The survey did show chains winning on technology, social media and convenience—clear advantages of scale.