Another Month of Traffic Declines for Restaurants

Same-store sales flat for November

December 8, 2017

The restaurant industry continued to see traffic declines in November, according to new data from TDn2k, while same-store sales were essentially flat, signaling that the industry hasn't really stemmed its long decline.

TDn2k reported that same-store sales for the month edged down 0.04% year over year. The flat performance came after a 0.9% gain in October, the industry's first comparable increase since February 2016.

Still, TDn2K noted, November's performance was better than the average 1.6% sales decline over the first nine months of the year. However, same-store traffic declined 2.5% in November. The restaurant industry has not seen a positive same-store traffic month in nearly three years. 

High menu prices have been a sticking point for consumers, and prices continued to rise last month, with the average check increasing 2.4% year over year, a slightly smaller gain than the 2.5% registered in October.

“Higher check average increases are risky in a market with steadily decreasing traffic, but brands may be using price to support margins as they face rising labor and operating costs,” said Victor Fernandez, executive director of insights and knowledge at TDn2K.

Restaurants are feeling some of the same pinch that the retail industry overall has faced as price comparison and deal-hunting have become common among mobile-phone toting consumers—especially millennials.

A recent survey of restaurant mobile app users by Market Force Information found that half said they use the apps to find discounts or promotions, while 41% use them for loyalty programs.

Millennials are particularly attracted to loyalty programs. A Lab42 survey released in June found that roughly three-quarters of those ages 23 to 36 consider loyalty programs an important influence when making a purchase.

Photo by Rob Bye on Unsplash