April restaurant sales best in nearly 3 years
For the restaurant industry, April did indeed bring showers, but those of increased business, according to the most recent data from TDn2K, showing that same-store sales grew 1.5 percent, up 0.7 from March. It was the industry's best month since September 2015 for sales growth, according to a news release.
Likewise, same-store sales growth calculations on a 2-year basis showed small positive growth — which has only occurred one time in the past 18 months. That, said the research company, "could signal that the industry may be entering into a period of long-term recovery."
"We are seeing an uptick in restaurant revenue beginning with the fourth quarter of last year," TDn2K Vice President of Insights and Knowledge Victor Fernandez, said in the release. "Stronger economic conditions and high consumer confidence are certainly factors. However, this performance has to be considered against last year's soft sales. A longer view suggests there are still significant challenges for the industry."
That's the good news. Less so, is the fact that even with all the positive results, restaurants still showed a drop in same-store traffic of -1.4 percent in April. TDn2K said that the sheer number, or over-supply of restaurants in the market, as well as increased competition from outside the chain restaurant sector, prevails and will likely continue to do so for the rest of 2018.
Aside from the state of Florida, the strongest region for restaurants in the U.S. was the in the southeastern states, where sales grew 2.5 percent and traffic edged up 0.6 percent. Nonetheless, the southeastern U.S. state of Florida was the weakest performer in April, with sales actually down 0.2 percent and traffic off 2.9 percent.
The nation's markets in the plus column for the month totaled 147 or 75 percent, while 49 market (25 percent) had a down month. Mountain Plains, Southwest and Western states also performed at the top of the heap in April.
Job growth in the industry, year-over-year, was 1.8 percent with hourly employee and manager still a major concern for operators. TDn2K said since the unemployment rate fell below 4 percent for the first time in 18 years, most brands say they are perpetually understaffed. However, rolling 12-month turnover rates dipped slightly during March, a possible sign that turnover rates have peaked.
TDn2K said there has been a consistent trend showing off-premise consumption are outpacing dine-in sales. In April, to-go, delivery, catering and banquet sales each outperformed sales growth for dine-in sales. Across industry segments, growth continues in this area, with consumers' continued shift to "on-the-go" dining.
Same-store beverage sales also grew appreciably in April to the highest level in more than 30 months. TDn2K studies show both full-service and limited service restaurant guest increasingly value beverages — either alcoholic for full-service or soft drinks for limited service as part of their restaurant experience.
TDn2K's said its White Box Social Intelligence data indicated that top-performing brands by sales growth have higher guest sentiment around beverages.
Casual and fast casual recovery
Fast casual, casual dining and upscale casual were top performers in April, continuing to grow after years of under-performance. These segments have year-to-date positive same-store sales growth and are the segments with the biggest improvement in sales growth over the previous year.