Franchise News
Even with higher ticket prices and lower staffing needs thanks to delivery demand, concerns about decreasing foot traffic or on the rise.
It’s long been a fundamental tenet in the restaurant industry that foot traffic drives sales. In an era seeing the rise of ‘dark’ or ‘ghost’ kitchens thanks to the ever-increasing demand for third-party delivery, it’s no surprise fewer customers are coming through the door. Even with the resultant dip in staffing costs, according to an article in QSR, this historically lower traffic level is cause for concern for some economists and restaurateurs.
Citing TDn2K’s latest Restaurant Industry Snapshot, the article said that last month amounted to “another month of rollercoaster sales and traffic. Sales rebounded 1.6 percentage points in May after a lackluster April. You can thank the absence of external factors, like seasonal storms or holidays, for the month-to-month boost. May’s 1.1 percent growth, however, was joined by same-store traffic declines of 2.1 percent. While this marked a 1.5 percentage jump from April’s growth rate, it’s far from where restaurants would like to be, TDn2K said.”
According to the Industry Snapshot, however, April and May sales of this year were at least comparatively better than those of the same time period two years ago, the article said.
“This longer-term recovery is welcome news for an industry struggling with market oversaturation and increased competition,” TDn2K said, according to the article. “What it also suggests is that restaurants are finding alternative channels to boost sales despite muted traffic, at least compared to a few years ago. For most chains, this is coming through off-premises pathways, whether it’s to-go, delivery, catering, and other ways to capture share of a growing at-home segment,” said the article.
Foot traffic is certainly on the mind of some of the biggest names in QSR: McDonald’s unveiled a tech-rich flagship store in Times Square last month, in part to support a strategy to “drive sales by bringing customers back to its stores,” according to CNBC. The burger giant also eliminated its Signature Item menu recently so as to eliminate prep time and bring back visitors presumed to be turned off by a longer wait time.
To read the full article, click here.
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About the Author
Katie LaTour is a staff writer for 1851 Franchise and Estatenvy. She has experience in copywriting, editing and translation, and has written content for brands including Coca-Cola, Ivivva and Ray Ban's. She holds a Master of Arts in Writing and Publishing from DePaul University and a B.A. in English and Spanish from the University of Dayton. Presently, Katie is working on a poetry collection and building a platform for Chicago creative professionals to share best practices.
