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Restaurants' Q3 traffic worsens, but hopeful signs emerge

The third quarter of 2017 proved restaurants’ second-weakest sales period in five years, but a huge asterisk on the results is reason for guarded optimism, according to a snapshot of performance just released by researcher TDn2K.

Traffic fell during the July-through-September period by 4.1% on a same-restaurant basis, hammering down comparable sales by 2.2%, a 1.2-point decline from the second quarter, TDn2K found. But “a deeper analysis reveals these latest results, though troubling, may not be as worrisome as they appear,” the firm said in releasing its most-recent Restaurant Industry Snapshot. 

“On one hand, the last three months were plagued by significant events that are external to the industry but nevertheless had considerable negative impact on restaurant sales,” explained Victor Fernandez, TDn2K’s executive director of insights and knowledge. “Hurricanes Harvey and Irma affected millions of people in two of the country’s largest economies during the quarter.

“On the other hand,” he continued, “there were some signs of improvement throughout the quarter, especially when removing the effect of Texas and Florida on the national sales results.”

With those areas excluded, the industry registered a 2.8% decline in same-store sales for July, a 1.8% decrease in August and a 1.4% slip in September, signaling a positive trend. “Clearly, sales are still declining year-over-year,” said Fernandez, “but the rate at which they are falling has been decelerating. The trend is for improving results throughout the quarter once some of the external factors are isolated.”

Fine-dining restaurants were hit particularly hard by the bad weather in Texas and Florida, TDn2K noted.

Overall, same-store sales for Texas restaurants fell 5.1% in August and comps for Florida establishments dropped 6.2% in September.

Upscale casual dining was one of the strongest performers nationwide during the quarter, along with family dining, the data show.

TDn2K collects its Snapshot data from 30,000 restaurants representing more than 155 brands.

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