Restaurant same-store sales in US shows positive growth in July

14th August 2018 (Last Updated August 14th, 2018 15:09)

Restaurant same-store sales in the US have increased by 0.5% in July, which represented a 0.5% point drop from June, according to insights from TDn2K’s Restaurant Industry Snapshot.

Restaurant same-store sales in US shows positive growth in July
Restaurant same-store sales in US shown positive growth in July. Credit: Jay Wennington, Unsplash.

Restaurant same-store sales in the US have increased by 0.5% in July, which represented a 0.5% point drop from June, according to insights from TDn2K’s Restaurant Industry Snapshot.

The data is based on weekly sales from more than 30,000 restaurant units, over 170 brands and representing annual revenues exceeding $70bn.

According to TDn2K data, the drop follows after three straight months of flat sales growth.

The dip was driven by a drop in same-store traffic, which at -1.8% year-over-year represented a 1.3% point decline from the previous month.

TDn2K insights and knowledge executive director Victor Fernandez said: “Restaurants had a terrible month in July of last year. With same-store sales down -3%, July 2017 was the third-worst month in the last three years.

“While expectations are for restaurant spending to continue to expand slowly, the risks appear to be on the side of a moderation in demand as we go into 2019.”

“Only two winter months hit by extreme weather posted weaker results. So the small uptick in sales in July is far from being cause for celebration given the extremely easy comparison.

“If anything, it was a great missed opportunity for the industry to post its best results in years.”

According to the report, only eight of the 11 regions of the country posted positive same-store sales growth during July.

Ten regions saw positive growth in June. The Western region of the country continued the trend through July of being the strongest based on same-store sales.

The report also noted that the fast-casual industry segment performed well based on sales in July while family dining and casual dining reported positive sales for the month.

TDn2K economist Joel Naroff said: “Significant economic momentum was carried into the summer that should allow solid growth to continue for the overall economy. Despite a less than stellar July job gain, the three-month average was still extremely robust.

“But wage gains remain limited and continue to expand at a lethargic pace. While that has yet to affect consumer spending, which is being hyped by the tax cuts, it raises questions about the ability to sustain the solid consumption over the next year.

“In addition, there are few indications the issues being created by the trade skirmishes will dissipate soon. Thus, while expectations are for restaurant spending to continue to expand slowly, the risks appear to be on the side of a moderation in demand as we go into 2019.”