Restaurant Industry Achieves First Quarter of Positive Sales Growth in Two Years

Same-store sales growth for the fourth quarter was 0.4 percent, a very robust 2.6 percentage point improvement from third quarter results. This is the first quarter of growth in the last two years. The signs of relative improvement that the restaurant industry began showing since the beginning of the quarter continued through December. Restaurant same-store sales posted 0.3 percent growth for the month of December. This was the second-best month based on sales growth since March of 2016. The best month during that period was October of 2017, which is another sign that restaurants have been doing better in recent months. These insights come from TDn2K™ data through The Restaurant Industry Snapshot™, based on weekly sales from over 30,000 restaurant units, 170+ brands and represent over $68 billion dollars in annual revenue.

Traffic declined -1.8 percent in December, which also represented the second-best month in almost two years. Additionally, that was an improvement of almost 0.7 percentage points from November. Same-store traffic was -1.9 percent during the fourth quarter of 2017. While negative, it’s the best result posted by the industry in the last two years.

However, not all traffic improvement resulted to sales. Guest checks grew by 2.1 percent year over year, compared with 2.5 percent for the previous two months. This suggests some of that December traffic may have been brought in through promotions and discounting.

“Although it is great to see the industry move away from the recurring story of declining same-store sales, we also must keep things in perspective,” commented Victor Fernandez, executive director of insights and knowledge at TDn2K. “December of 2016 had very soft same-store sales and traffic results, so lapping over those results didn’t pose much of a challenge. Over a longer view, same-store sales declined by -2.0 percent during the fourth quarter of 2017 when compared with that same quarter in 2015. Furthermore, the trend of declining guest traffic continues to plague the industry and is one that seems unlikely to reverse any time soon.”

Annual Results Underwhelming Despite Fourth Quarter Recovery

The positive momentum experienced by the industry in the fourth quarter was not nearly enough to recover another disappointing year for restaurants. Same-store sales for all of…

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