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Restaurant Sales & Traffic pick up momentum

Posted by Dave Bennett on 12/13/17 9:05 AM

Much has been written over the past two years about the dismal pattern of same store sales and traffic for restaurants. Traffic has been negative throughout this period, and sales have rarely been positive, and then only when restaurants increase prices.

There is new evidence that some of the fundamentals are changing. According to the Mirus Index, both sales and traffic have been improving in the 4th quarter. And if you set aside declines in October and November, the trend for same store traffic has been improving since May. It has almost, but not quite, elevated back to zero. For same store sales, July was the pivot point and every month since then has been an improvement.

 

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For the entire year of 2017, same store sales will be positive in the Mirus Index unless something awful happens. Depending on how the next two weeks go, the Sales Index for the whole year should be positive about 0.4%, and traffic will be negative about (2.8%).

Mirus Index is a consolidation of about 5,000 restaurants in all segments of the restaurant industry. Clients of Mirus have access to a set of benchmark measures that allow them to compare their internal results with the broader market. On average, Mirus clients enjoy sales store sales and traffic results that are 100 - 300 basis points better than the overall industry measures.

So if Mirus Index is reasonably accurate, what changed? There are ample macro-economic indicators that have been running strong for a long time. The stock market, unemployment, and the number of new jobs have all been improving for more than a year. They do not explain the improvement for restaurants, at least not entirely. The recent track record for average wages and household disposable income have not impressed economists this year, and do not appear to have put more money in the pocket of the average American.

Since August this country has been hit by multiple hurricanes, floods and wild fires. But things were getting better for restaurants throughout this period. We will need more time and more evidence to be confident about why things are improving for restaurants. In the meantime, we should all get out there and do our part - visit a restaurant!

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About Mirus:

Mirus is a multi-unit restaurant reporting software used by operations, finance, marketing, and IT.

For more information, please visit: www.mirus.com

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Financial Perspective (PDF)

Topics: Restaurant Profit, Mirus Updates, Restaurant Operations, Restaurant Performance

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