Nation’s Restaurant News: 3Q Sees Declines in Sales, Traffic, Job Growth

The restaurant industry continued to see declines in the month of September. According to a recent Nation’s Restaurant News article, same-store sales were negative for the fourth month in a row along with a period of declining guest counts. Adding to the declines this month was job growth, which

“The key driver behind the fall in sales during September was a decline in traffic, which continues to be the biggest challenge for chain restaurants,” said Victor Fernandez, executive director of insights and knowledge for TDn2K.

Compared to August, same-stores sales saw a decline of 0.5 percent, resulting in sales growth of -1.1 percent for September. In terms of traffic, stores saw a slight increase in August, but has since fell to -3.5 percent during September.

September and third quarter results are proving to be a main factor in the number of recent bankruptcies in the industry. While economic activity and general consumer sentiment have been strong, restaurants are searching for ways to see that reflected in store traffic.

“Growth in sales at restaurants has slowed recently, but only modestly according to the government’s numbers. There is no recession in the sector as households continue to eat out,” says Joel Naroff, president of Naroff Economic Advisors and TDn2K economist.

Quick-service is an example of one segment that is still performing very well. It was the only segment to receive positive gains, with same-store sales growth of 2.2 percent during the third quarter.