Chain restaurant sales increased 7.4% in April, according to the latest Technomic Chain Restaurant Index, as large-scale chains led an industry that appears to be emerging out of a three-year slump.
The 7.4% was the industry’s best performance of the year. Total traffic, meanwhile, increased 3.6%, the year’s second-best month.
All major industry segments showed improvement compared to March. The results suggest consumers emerged from their winter hibernation a little more eager to eat out.
Technomic Chain Restaurant Index
“Consumers’ personal financial situations continue to trend positive along with low unemployment,” says Sara Monnette, vice president, innovation, with Technomic, a sister company of Restaurant Business.
“Many parts of the country had a very cold spring that lasted through April. At some point, consumers get sick of it and stop staying in,” she says. “Despite below-average temperatures, it appears consumers were willing spring to come by heading out to restaurants.”
The strongest results came at quick-service restaurants, where sales rose 8.8% and traffic increased 3.9%.
Technomic made some adjustments in April to better reflect Starbucks’ sales. But strong showing by some large chains also had an impact on quick-service numbers, including McDonald’s, Chick-fil-A and Taco Bell—three of the industry’s largest chains.
Subway, the third-largest chain in the U.S. by domestic system sales, also showed improved sales for the second-straight month.
The index measures sales from the 200 largest chains, based on Technomic's Top 500 Chain Restaurant Report.
The index uses data from Technomic Transaction Insights, which collects information from 3 million customers and nearly 20 million restaurant visits.
The index measures total sales and traffic, meaning it includes new units not included in same-store sales results.
April’s results include another improved month for casual dining.
Casual- and fine-dining chains reported 3.1% sales growth in the month, while traffic was down just 0.2%. That was a substantial improvement from the 1.7% traffic decline in March and the 2.4% decline in February.
“It’s hard not to say that casual dining isn’t showing momentum,” Monnette says. “Cautiously, it is still a wait-and-see game. If we see two more months of growth for the segment, then I would call it a comeback.”
Fast-casual chains were not far behind quick-service concepts in terms of sales performance. Sales rose 8.3% at fast-casual chains, and their traffic increased 3.7%. Both numbers were improvements over March. But fast-casual chains are also growing units at a much faster pace than any other sector.
Midscale chains, which generally include family-dining concepts such as Denny’s and IHOP, saw 2.1% sales growth and 4.5% traffic growth in April. The 2.1% sales figure was a slowdown, but midscale concepts did see more customers in April than they did in March.
The index shows that restaurants appear to be gaining some momentum heading into the summer months.
“The restaurant industry is finding more ways to meet consumers on their terms—expanding dayparts, taking delivery very seriously, looking to utilize new occasions and keeping consumers’ attention with innovative limited-time offers,” Monnette says. “The efforts have been met with positive consumer response that has contributed to improved sales and traffic numbers.”
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