Restaurant industry's Q1 end in 'some wins, some losses'

| by Dustin Minton
Restaurant industry's Q1 end in 'some wins, some losses'

The first quarter of 2017 saw wins and losses for players in the restaurant industry. In the end, restaurants saw a 0.7 same-store-sales decrease overall, following Q4's flat performance in 2016. Some attribute the sales slump to lower grocery store prices and selective consumers. Others note higher menu prices and some concepts' lack of overall key differentiators as the culprit.

Domino's Still dominates

Once again, pizza saw the highest same-store sales increase at 3.9 percent. Domino's continues to shine and led the segment with a 14.1 percent surge. Some look to replicate the “Amazon of Pizza's” successes digitally, but the company said it owes its consistent upswing to knowing their customer and improving mainstays like the classic pepperoni pizza.

Fast Casual falls

Sales for the fast casual segment fell again in Q1 resulting in an overall 2.0 percent decline. However, not all clouds bring rain. This quarter, Chipotle saw an improvement in the form of a 17.8 percent same-store sales increase—the first sales increase since 2015's foodborne illness outbreak. Panera also helped buoy fast casual with a 5.3 percent increase. The company cites digital innovation as a deciding factor in the sales upswing.

On the flipside, companies working against the segment average include Pie Five, Pollo Tropical and Qdoba, which experienced 15.8 percent, 6.7 percent and 5.9 percent respective drops. Additionally, Shake Shack experienced its first same-store sales decrease since its 2015 IPO at 2.5 percent.

Facing forward

Today's reality for restaurants means looking beyond the food and viewing the experience as a total package. From the look of your space when your guests walk through the door, to the picture they post on Instagram after receiving their meal from a third-party delivery service, every aspect is taken into account when consumers decide where they'll spend their cash. When reviewing plans to revamp in the quarters ahead, what matters most is that decisions are made with evolving consumer preferences in mind.


Topics: Trends / Statistics

Dustin Minton
Dustin co-leads BDO's Restaurant Practice, and serves as an advisor to restaurant companies across the U.S. His clients include many of the nation's fastest growing and most well-respected brands. www

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