Dallas, Texas (PRWEB) March 06, 2015
February might have been the worst month on record weather-wise for many regions of the country, but for restaurants, the results were far from dreadful as the industry was able to post its eighth consecutive month of positive same-store sales growth. With these latest results, Q1 of 2015 is firmly positioned to become the third consecutive quarter in which the industry has achieved positive growth in comparable stores; the first time in over two years. This insight comes from data reported by TDn2K’s Black Box Intelligence through The Restaurant Industry Snapshot for February, based on weekly sales from over 20,000 restaurant units representing over 45 billion dollars in annual revenue.
Same-store sales growth was 2.1% during February, a 4.0% drop from the growth rate reported for January. “Although this drop could seem to be a sign of weakness for restaurant sales in February, the reality is last month’s results were greatly aided by more favorable winter conditions than were experienced in January of last year, while February was the opposite. February 2015 winter storms were much worse than what was experienced a year ago, negatively impacting sales during the month,” commented Victor Fernandez, Executive Director of Insights and Knowledge for TDn2K. “However, same-store traffic did drop during February, the first month since November in which we have tracked negative traffic growth, evidence that the weather did have a negative impact on the industry.”
“There are two main reasons why we believe the industry overall was still able to achieve positive same-store sales during February,” continued Fernandez. “First, last year’s February sales were also soft due to bad weather. As a comparison, same-store sales growth was -1.0% and traffic -3.8% for the same month a year ago. This means, the growth hurdles were relatively easy to jump over this year. Secondly, we believe the underlying strength in the economic conditions and positive momentum of consumer optimism is still there, proven by the strong sales growth posted by the western and southern regions of the country during the month.”
Same-store traffic growth was -1.0% during February, a 3.5% drop from the growth rate reported in January. However, even with this latest downturn, Q1 2015 is likely to result in positive same-store traffic in restaurants, further evidence that the industry has likely found a new cycle of long term growth.
The best region of the country during February was the Western region with 5.1% same-store sales growth. The worst region was New England with same-store sales growth of -5.8%; not surprising given the abysmal winter storms the region has endured. However, most of the country did experience a relatively good month, with 139 of the 190 DMAs tracked by Black Box Intelligence posting positive sales growth during February.
“There is some concern due to gas prices beginning to rise again,” continued Fernandez “but they are still significantly lower than they were a year ago. More importantly, the research has shown that up until now, lower gas prices have only modestly correlated with restaurant same-store sales and same-store traffic has been virtually unaffected by them. We don’t expect much impact on March’s sales as a result of this trend.”
The staffing pressures for restaurants continue to increase due to improving economic conditions. The industry posted 3.0% year-over-year job growth during January according to TDn2K’s People Report’s latest results. Although this represents a slowdown from the 3.9% job growth reported for December, the industry has now experienced annual job growth of over 3.0% for 15 consecutive months, primarily attributable to the pattern of new restaurant openings. Another significant challenge for the industry continues to be restaurant management and hourly turnover; both increased again during January. The industry has now experienced 10 consecutive months of rising restaurant management turnover and 17 months in the ranks of hourly employees. These current turnover levels rival those reported before the recession and support People Report’s forecast of an impending acceleration in the growth of wages and salaries.
Restaurant guest satisfaction, measured by TDn2K’s White Box Social Intelligence, reported that “food” continues to post the largest share of online activity of the three key attributes tracked (other attributes include: “service” and “intent to return”). Food mentions represented 87% of all online mentions tracked during February (from a sample of 3.8 million distinct social media generated mentions), while service continues to be the attribute generating the least overall mentions (only 4% of all mentions in the sample).
The attribute that tends to generate the highest percentage of positive mentions is “intent to return”. About 46% of all online mentions related to this attribute are positive. As a comparison, approximately a third of all mentions related to food and service during February were positive.
A shift from the past two months, there was a lot of positive buzz around Quick Service in February. This segment generated the highest percentage of positive mentions for two of the three attributes (food and intent to return). The leading segment in terms of percentage of positive service mentions during the month was Family Dining.
TDn2K (Transforming Data into Knowledge) is the parent company of People Report, Black Box Intelligence and White Box Social Intelligence. People Report provides service-sector human capital and workforce analytics for its members on a monthly basis. Black Box Intelligence provides weekly financial and market level data for the restaurant industry. White Box Social Intelligence delivers unparalleled consumer insights and reveals online brand health. Together they report on over 30,000 restaurant units, one million employees and 45 billion dollars in sales. They are also the producers of two leading restaurant industry conferences: Summer Brand Camp and the Global Best Practices Conference, each held annually in Dallas, Texas.