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Technomic: Chain restaurants still have traffic problems

Traffic fell 5.4% in November as the industry continued losing customers.
Photograph: Shutterstock

Chain restaurants continued losing customers in November, according to the latest Technomic Chain Restaurant Index, as a three-year-long industry slump continued to pose problems across most sectors and menu varieties.

Industry sales fell 1.8% in November, according to Technomic, while traffic fell 5.4%. Every sector saw declines during the month—the worst month for the industry since May.

The index, based on data from nearly 20 million monthly restaurant visits, paints a picture of an industry that is struggling to regain favor with consumers.

The index compiles information from Technomic’s Transaction Insights, which collects data from 3 million customers and nearly 20 million monthly restaurant visits. It is based on sales at the 200 largest restaurant chains based on the Technomic Top 500 Chain Restaurant Report. It measures total sales and traffic, rather than same-store numbers.

Sales were troubled throughout the industry, but particularly at chains with wait staff. Casual-dining and fine-dining concepts saw sales fall 5% and traffic down 9.4% in the month.

In particular, sports bars and other varied menu chains struggled toward the end of 2018. Sales at such concepts fell 8.6% in November and traffic was down 11.5%—making it the industry’s worst performing sub-sector based on both measures.

Sales at midscale chains, also known as family dining, declined 3.4%, with traffic down 4.2%.

Among limited-service chains, quick-service chains outperformed fast-casual—sales at traditional fast-food chains declined 1%, while they fell 1.4% at fast-casual concepts.

Fast-casual traffic performed even worse, down 6.7% compared to a 4.8% decline at quick-service chains.

The weak fast-casual traffic numbers suggest that sector doesn’t have much pricing power heading into 2019.

Sandwich concepts performed the worst among limited-service chains, with traffic down 11% and sales down 6.9%.

The weak sales and traffic come even as the overall restaurant industry appeared to accelerate its expansion toward the end of the year. Restaurants have added more than 65,000 jobs since October, according to newly released federal data.

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