While restaurant industry performance has been dismal for the past six quarters, June’s results provided a bit of good news.

The month’s sales and traffic growth were the best monthly performance since January, and the second quarter of 2017 posted the best results since the second quarter of 2016, according to TDn2K’s Restaurant Industry Snapshot.

While economic indicators have been pointing to improved conditions this year, the reality is the weak results in 2016 make this year’s comparisons much easier, says Victor Fernandez, TDn2K’s executive director of insights and knowledge.

Same-store sales fell 1 percent in June and in Q2 2017, compared to a first-quarter same-store sales drop of 1.6 percent. Traffic declined by 3.1 percent in the second quarter, a 0.6 percent improvement from the first quarter.

Average guest checks grew at the same rate in the second quarter as in the first. Both quarters posted 2.2 percent increases over the year. Check averages have been growing slowly since 2015, when average checks rose by 2.8 percent.

“Brands seem to be reluctant to implement significant price increases given the current environment,” Fernandez says in the report. “Price promotions have been widely utilized, especially by struggling brands and segments to drive traffic.”

The bar and grill sub-segment of casual dining has experienced no growth in average guest checks for the past year, while casual dining as a whole has seen guest checks rise by 1.2 percent. Along with bar and grill, fast casual was the weakest-performing segment in the second quarter.

Quick service, which was the top-performing segment in 2016 and was among the top three segments in 2015, has struggled to build on the rapid growth, with three consecutive quarters of negative same-store sales. Fine dining and upscale casual were the only two segments with positive sales in the second quarter, and have been the best performing segments this year.

Joel Naroff, president of Naroff Economic Advisors and TDn2K economist, says in the report that while both job and economic growth picked up in the spring, neither can be classified as robust.

“Consumption, meanwhile, has slowed and vehicle sales have faltered. That is good news for other retail sectors, including restaurants, as credit growth is moderating,” Naroff says. “The rise in debt payments has funneled money from spending on other goods and services. National retail sales data seem to be indicating the outflow from restaurants is ending, but an uptick in demand has yet to appear.”

But until wage gains improve, TDn2k says, no major acceleration in restaurant spending should be expected.

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