Full-service restaurant sales recover in June
Restaurant industry same-store sales and traffic rose in June, as quick-service chains maintained momentum and casual-dining brands snapped back to life after a difficult May, according to the latest NRN-MillerPulse survey.
MillerPulse, an operator survey exclusive to Nation’s Restaurant News, included respondents from 59 restaurant operators in July regarding June sales, profit trends, performance and outlooks. Respondents included operators from all regions of the country that represent the quick-service, casual-dining, fine-dining and fast-casual segments. Those surveyed in June represented restaurants that booked about 14 percent of industry sales.
Overall, industry same-store sales were up 3.2 percent in June compared with 3.1 percent in May, the survey found. Sales at quick-service restaurants, which include both fast-food and fast-casual brands, rose 3.9 percent in June, down from a 4.8-percent increase in May. On the other hand, full-service restaurants, which include both fine-dining and casual-dining brands, reported a 2.2-percent gain in same-store sales compared with a 0.9-percent increase, with both sub-segments showing improvement.
However, despite the uptick in full-service sales, the industry has reason to remain cautious, according to Larry Miller, restaurant securities analyst at RBC Capital Markets and creator of the monthly MillerPulse surveys.
“It was a pleasant surprise to see casual dining snap back, but we are concerned that overall sales remain soft, particularly in casual dining,” Miller said. “I think it speaks to the uncertainty consumers and business owners have regarding the direction of the economy.”
The survey also found that traffic increased at both quick-service and full-service restaurants for the month but remained soft compared with the early part of the year. Quick service reported a 1.9-percent increase in traffic in June, while full-service reported a modest 0.1 percent for the month.
Despite the mediocre month, operators remain optimistic that sales trends will improve in July. A net 20 percent of operators surveyed said they believed that same-store sales would be better in June than they were in July. That number was calculated by the net 42 percent of those surveyed who thought things would be better versus the 22 percent that thought things would get worse. The survey also found that operators from three out of the four segments — fast casual, casual dining and fine dining — thought things would improve over the next six months, with quick service being the only segment that felt things would get worse.
That being said, Miller remains concerned about the future.
“I think we are going to see more of the same: Volatility. Uncertainty. A continuation of industry same-store sales in the 2 percent to 3 percent range,” he said. “We're hopeful that as we pass these domestic hurdles — elections and the fiscal cliff — things will accelerate into calendar 2013.”
Register for MillerPulse at www.nrn.com/industry-insight.
Contact Charlie Duerr at email@example.com.