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Black Box: Same-store sales improve in June

Takeout orders helped boost casual dining, but traffic was still a problem.
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Restaurants got back to growth in June, according to the latest Black Box Intelligence index, as same-store sales rose 1.1% in the month.

That was an improvement over the flat same-store sales in May and was the fourth straight month that same-store sales were at least flat, according to the index. Same-store sales for the second quarter rose 0.8%, the third straight quarterly increase.

Yet industry traffic, which has been down for much of the past three years, remains a problem. Same-store traffic declined 1.7%. That was better by about 1 percentage point, yet the industry continues to lose customers at existing restaurants.

For the quarter, traffic was down 2%, a slight improvement over the 2.6% decline in the first quarter.

“They’re getting a little bit better,” says Bob Rycroft, vice president of advisory services for TDn2K, the parent company of the Black Box index. “Long term it’s a concern. It’s great to see the top line going up. But it’s hard to declare victory when we’re still losing traffic, even at modest amounts.”

One of the biggest bright spots this year, however, has been casual dining. Concepts with waitstaff have rebounded somewhat this year, largely due to their focus on takeout orders. Casual-dining concepts have reported double-digit increases in to-go sales so far this year, Black Box said.

“The vast majority in the improvement in sales is coming from off-premise,” Rycroft says. “That segment is doing a much better job on to-go than they have in the past.”

Consumers have been increasingly demanding more convenience from their restaurants, helping the quick-service and fast-casual sectors to grow. Casual-dining concepts have only recently taken advantage of that trend, and they have more growth to find.

“Of all the segments, they are most uniquely positioned to exploit it,” Rycroft says. “Casual-dining folks know they’ve got demand for some of these craveables that they’ve worked with.”

But the industry continues to struggle with traffic, which has been largely blamed on the proliferation of restaurants.

There are more locations and competitors than ever, and independents are luring more customers, as are grocery and convenience stores selling prepared food.

Yet Rycroft notes that “The averages hide the fact that there’s a lot of good going on in restaurants.”

Specifically, he says, there are many chains experiencing strong growth.

“The stronger chains continue to get a little bit stronger,” he says. “It’s the ones at the bottom coming a little further away from the median” that are driving down traffic numbers.

That growing gap, he says, needs to narrow if restaurants are to get back into positive territory.

“They’ve got to reduce the gap between the strong performers and the ones that are lagging,” Rycroft says. “Rising sea levels help all chains.”

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