Industry News | July 15, 2013

Restaurant Industry Sales Fell Flat in June

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Black Box Intelligence and People Report released the Restaurant Industry Snapshot for June, reporting flat sales during the month—a disappointment after three straight months of positive sales.

Same-store sales were 0 percent in June, a decrease from a 0.8 percent increase in May and a 0.4 percent increase in April.

Same-store traffic results declined 2.5 percent, also a decrease from the May result of a 1.6 percent decrease. After the relatively strong growth during the first two months of the quarter, June’s flat results contributed to a modest 0.4 percent sales growth in comparable stores during Q2 2013.

However, this small growth is still positive news for the industry, considering the challenging environment experienced by restaurants during Q1, which resulted in a drop of 1.3 percent in same-store sales during the first quarter.

Same-store traffic growth during the second quarter of 2013 continued to be negative, but the negative 2 percent guest counts showed considerable improvement versus negative 3.7 percent reported for Q1 2013.

Consumer Edge Research, a partner company with People Report and Black Box Intelligence, also released the “Restaurant Willingness to Spend Index,” with a value of 85 for June, a decrease from the index score of 88 reported in May.

Based on historical data gathered in this partnership, a decrease in the index score would typically suggest a slightly lower Black Box Intelligence comparable stores sales rate in the month of July as compared to the June sales rate.

“Sales are still weaker than we would like to see, and it was a bit disappointing to observe the moderate deceleration in June after experiencing three straight positive sales months this spring,” says Bill Schaffler, president at Black Box Intelligence and People Report.

“On a more positive note, the consumer is indicating a heightened willingness to spend in restaurants as compared to the same month one year ago, but it appears the industry is still operating in a 0–1 percent sales environment,” he adds. “Nothing has really changed in our opinion.”

Additionally in June, the California region performed the best with a positive 1.8 percent same-store sales increase, while the Mid-Atlantic region was the lowest-performing area, with a same-store sales decrease of 2.0 percent.

Eighty-two out of 177 DMAs posted a positive result in June, down from 104 in May.

People Report data reports turnover results by position by industry segment to its member companies each month. In May, results show management and hourly turnover increasing. Most recent job growth reported by People Report has increased to 1.9 percent, higher than last month’s result of a 0.4 percent gain.