Operations

Restaurant sales, traffic drop to July numbers

December's month full of holidays failed to bring much cheer to restaurateurs in most cases, since sales and traffic were both off markedly.

It was largely a bleak December for restaurant brands. (Photo: iStock)

January 18, 2021

December was a terrible month for restaurants, according to data from Black Box Intelligence, which revealed that industry-wide results for the month were the worst that the U.S. has seen since last July.

Across all restaurant service categories, same-store traffic growth was down 18.6%, which is 3 points lower than November. The data also revealed that same-store sales growth was down 13.3%, making it the second straight month that year-over-year sales growth fell by more than 3 points compared to the previous month.

Black Box Intelligence attributed the downward trend to rising numbers of COVID-19 cases and winter weather hindering outdoor dining, but Vice President of Insights and Knowledge Victor Fernandez pointed said there was light at the end of the tunnel.

"The downturn in same-store sales during December was pretty widespread across all segments, with just one exception: fast casual," he said in an interview with QSRweb. "All other (including QSR) worsened in year-over-year sales performance compared with November.
"But even with that drop, QSR's same-store sales growth remained positive for the eighth consecutive month. Meanwhile, even though fast casual sales improved, the segment has yet to be able to cross over into positive sales growth territory again.

Fernandez said holiday season sales were weak across retails, likely due in some part to the many millions who've lost their jobs. That, combined with the increasing number of COVID-19 cases in November and December just had people hunkering down at home.

"One interesting finding, was that the region that had the worse results based on same-store sales growth during December for full-service restaurants was California," he said. "This is understandable given the shutdowns there. But this was also the region in which QSRs' performance improved the most in December compared with the previous month. This suggests that QSR is not as susceptible to those increases in COVID cases and some full-service meals may be increasingly being switched to limited-service as health risks escalate."

The better news in all this is that Black Box Intelligence showed increasing activity across restaurants in the beginning of January, with data for the week ending Jan. 3 showing:

• Improved comp sales to year–over–year growth rates seen in early November.
• Off-premise sales growth accelerated sharply for all restaurant segments.
• Average spending per guest increased sharply.
• Improvement for full-service brands in comp sales growth.
• Limited-service dine-in sales growth dropped compared to the previous week.
• Best-performing states were Idaho, Mississippi, Alabama, Utah, Georgia, Arkansas, South Carolina, Tennessee and South Dakota.
• Worst performing states were Washington, Pennsylvania, New Mexico, California, Alaska, Michigan, Oregon, Minnesota and Illinois, along with those in Washington, D.C.

Black Box Intelligence tracks and analyzes nearly 300 brands with 2.4 million employees and 50,000 restaurant units. The company is based in Dallas.