March was the second-worst month for same-store sales in chain restaurants across the country since February 2014.
Despite positive predictions for the restaurant industry in 2016, chain restaurants took a hit in the first quarter. According to an article in QSR Magazine, March was the second-worst month for same-store sales in chain restaurants since February 2014, with -0.7 percent same-store sales growth.
That’s based on new data from TDn2K’s Black Box Intelligence through the Restaurant Industry Snapshot. It looked at weekly sales from over 24,000 restaurant units, representing more than 120 brands and $61 billion in annual revenue.
Negative same-store sales are uncommon for chain restaurants this time of year. March is typically a strong month for the restaurant industry as a whole considering consumers are more likely to spend money dining out when the weather gets nicer in the spring. But colder weather—combined with a drop in consumer demand—contributed to a slow month.
Victor Fernandez, TDn2K’s executive director of insights and knowledge, told QSR Magazine, “Although weather continued to be a factor in some regions of the country, the slowdown in restaurant sales appears to go beyond just that. It also goes beyond just a few brands having a tough time.”
March was the second month in 2016’s first quarter that reported negative sales growth. January also saw a dip, reporting -0.8 percent growth in same-store sales. With negative sales growth reported in two out of three months, the first quarter of 2016 broke a seven quarter streak of positive same-store sales.
Right now, it’s unclear whether this trend will continue in 2016. Consumer spending habits haven’t been consistent since the recession, however employment opportunities across the country are on the rise.
Joel Naroff, president of Naroff Economic Advisors, said, “This may turn out to be only a temporary pattern as confidence remains high, incomes are growing and job growth is solid. It would be expected, given the economic fundamentals, that household spending should rebound as we move into the summer, but the off spending patterns we have seen recently raise questions whether that upturn will be very strong.”
Click here to read the original QSR Magazine article.