In a year of some unnaturally large comparable sales numbers, nothing quite beats the results posted by STK.
The upscale steak concept, operated by the One Group, has already posted some eye-popping same-store sales this year, such as the 726% result in the second quarter as customers returned to its restaurants en masse. But its pandemic recovery has been especially impressive when the results are compared with 2019.
In the third quarter, the Denver-based chain posted two-year same-store sales results of 64%. In other words, its restaurants are generating nearly two-thirds more revenue than they did before anybody heard of COVID-19.
Yet that’s the story of the year for steak-based concepts, and especially upscale concepts. Consumers have been ignoring high prices to treat themselves to a hunk of beef. They’ve gravitated towards these concepts as more celebratory occasions or perhaps to reward themselves for getting through the pandemic. Or perhaps they just like steak.
The median two-year same-store sales for steak concepts was 20.4% last quarter, the third calendar quarter. Just about everyone is well above pre-pandemic levels. Like many casual dining chains, they’ve learned to keep some takeout customers, expanded outdoor dining and benefited from a consumer eager to treat themselves.
Steak concepts were among the biggest winners from the most recent quarter. But they weren’t the only ones.
Two-year median same-store sales
Winner: Aggressive recovery predictions
Almost nobody predicted a recovery this fast. The typical restaurant chain boasted two-year same-store sales of 7.7%, continuing generally impressive results from the second quarter.
That said, such results are under average. Overall restaurant sales are up about 10% over 2019 levels, suggesting that publicly reported chains are underperforming the overall industry.
Still, few anticipated such impressive quarterly performances this quickly. Most of us figured that a full recovery would have taken years.
Loser: Cheapskates
Now here comes the caveat: Much of the recovery has come from pricing, and not traffic. Overall, restaurant prices are up about 6.5% over last year, which has helped fuel some of this recovery. If we calculate those numbers on a two-year basis, the typical restaurant is charging close to 10% more than they did before the pandemic.
Customers are still paying these prices, at least enough to fuel the type of sales growth the industry has seen so far.
Winner: Chicken sandwiches
Quick-service restaurants have generally managed to maintain the business they gained during the pandemic when the only thing anyone had to visit was the drive-thru. Median two-year same-store sales for traditional fast-food chains was a more-than-respectable 10.7%.
But it really helped if those chains had chicken sandwiches on the menu. Two-year numbers were particularly good for McDonald’s (14.6%), Popeyes Louisiana Kitchen (14.3%) and KFC (13.4%). People really love their chicken.
Loser: Urban fast casuals
It’s not easy being a fast-casual chain in an urban environment and their recovery remains slow. The median fast-casual chain was up 3.4% over 2019 levels, which is a recovery but remains far below expected levels given price increases and the general performance of the industry as a whole.
Also, remove the two top performing fast casuals, Wingstop and Chipotle, and the typical publicly traded fast-casual concept remains underwater when compared with 2019. Companies like Shake Shack (down 14.8%) have a way to go before they can declare themselves recovered.
Winner: First Watch
Midscale concepts, or family dining, remain in a difficult spot. The typical family dining chain on the public markets is about flat. Denny’s and IHOP have both struggled to find workers for overnight shifts and Cracker Barrel has been slow to come back.
Which brings us to one of our newest publicly traded chains, First Watch, which is up nearly 20% over 2019 levels despite a pandemic that has supposedly sapped the breakfast business. It proves that a good concept can pull people in, even during an otherwise difficult environment.
One other note
For this exercise we used the same calculation to come up with a consistently calculated two-year same-store sales number for each chain. So our number may disagree with the chains’ own publicly reported two-year figures. In the case of First Watch, we used their reported number as prior quarter figures were not available.
Some chains (Krispy Kreme, Steak n Shake) do not report traditional same-store sales and others (Fat Brands, Portillo’s) don’t have enough data available.
RB will soon begin publishing restaurant chains’ same-store sales numbers, updated quarterly. So watch our website for further updates.