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Restaurant Industry Snapshot™ April, 2019

Restaurant Sales Stumble Not a Cause for Panic, Employee Vacancies Remain Bigger Concern


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Comp Sales & Traffic

Comp Sales

rolling 3 months

Comp Traffic

rolling 3 months

The fluctuations in restaurant sales growth performance returned during April. Same-store sales growth was -0.4 percent during the month. The industry has experienced two months of negative sales growth since the beginning of the year, potentially a troubling reversal of the persistent positive growth experienced during 2018.

However, the shift of the Easter holiday from March to April this year meant a negative hit on sales for many restaurant brands. Additionally, last April was one of the strongest based on same-store sales growth in 2018; restaurants still had positive sales growth on a two-year basis despite the year-over-year drop during the latest month.

What does this mean for the industry? Upward momentum in sales growth may still be there despite the stumble and it may be too early to panic.

Regional & Market Performance

Positive Markets 84 | 43% Negative Markets 112 | 57%

Strongest Region

  • Sales 1.08%
  • Traffic -2.25%

Weakest Region

  • Sales -1.92%
  • Traffic -4.93%

April was a soft month for restaurant sales from a regional perspective as well. Only three regions (the Western region, California and Florida) were able to post positive same-store sales growth. The Western region, the best performing based on sales growth in April, only achieved same-store sales of 1.1 percent. By comparison, the best performing region in March achieved almost 3.0 percent in same-store sales growth.

The Southwest was the worst performing region based on sales growth. Same-store sales for this region were 1.9 percent, with its traffic falling almost 5.0 percent year over year.

Things were not much better from a local market perspective. Out of the 196 individual DMAs tracked by Financial Intelligence (formerly Black Box Intelligence), only 84 (or 42 percent of these markets) were able to achieve positive same-store sales growth during April. The norm in recent months has been positive sales growth in about 75 percent of DMAs.

The Restaurant Workforce

job growth & turnover

Year/Year Job Growth*


Manager Turnover*

Q1 '19
Roll 12

Hourly Turnover*

Q1 '19
Roll 12
*Black Box Workforce Intelligence, March, 2019 Release

Despite the stumble in sales growth during April, the workforce continues as one of the biggest concerns for restaurant operators. While the data shows excellent service differentiates top performing brands in the marketplace, Black Box Intelligence (formerly TDn2K) studies powered by Workforce Intelligence (formerly People Report) reveal most restaurant companies are never fully staffed. “Excellent service” and “understaffed” are rarely a winning combination in restaurants.

The latest restaurant workforce numbers from Black Box Intelligence (formerly TDn2K)’s Workforce Intelligence (formerly People Report) indicate an increasingly challenging environment. On one hand, restaurant turnover for both hourly and management employees (which is already at historically high levels), inched up again during March.

On the other, the restaurant industry continues expanding and creating new jobs that need to be filled. Year-over-year growth in number of restaurant jobs was 2.7 percent in March.

Restaurant Sales Stumble Not a Cause for Panic, Employee Vacancies Remain Bigger Concern

The upward momentum in restaurant sales halted again during April. Same-store sales growth was -0.4 percent, hence sales growth has now been negative during two of the last three months. Although these results were undoubtedly disappointing for restaurant operators, it is too soon to start worrying about a true downturn for the industry. These insights come from Financial Intelligence (formerly Black Box Intelligence) data from Black Box Intelligence (formerly TDn2K), based on weekly sales from over 31,000 locations representing 170+ brands and nearly $72 billion in annual sales.

“April was a soft month for restaurants. Putting these results in context helps us remain cautiously optimistic about the current state of the industry,” said Victor Fernandez, vice president of insights and knowledge for Black Box Intelligence (formerly TDn2K). “First, the industry was lapping over one of the strongest months in same-store sales growth last year. When taking in a longer-term view of sales, the two-year growth rate of 0.9 percent during April still reflects a growing industry. Furthermore, all months since October of 2018, with the exception of February which was plagued by extremely bad weather, have reported positive same-store sales growth when compared with the same month two years ago. The average for two-year sales growth during the previous twelve months was -1.6 percent.”

Additionally, April was negatively impacted by the Easter holiday. This holiday translates into decreased restaurant visits for many brands and in some cases, closed restaurants. This year Easter was celebrated in April but in 2018 it fell in March. As a result, same-store sales growth approached -2.0 percent during the week of Easter. This negative sales growth was the worst for the industry since the last week of February when winter storms severely hurt sales in large portions of the country.

Declining Guest Visits Remain the Norm For Most Brands, Guest Checks Accelerating

Same-store traffic growth during April was -3.5 percent, a decline of 1.6 percentage points from March. However, the Easter effect also needs to be taken into consideration for traffic. The third week in April also experienced the worst traffic numbers since the end of February. The holiday shift aided March’s guest counts but negatively impacted April’s.

These poor traffic results again highlight how restaurants continue to rely on their guests spending more per visit to try to grow their sales. Average guest check growth has been accelerating since the fourth quarter of last year. This is likely a result of restaurant brands raising their menu prices at a faster pace and a favorable shift in product mix driven by a more confident consumer.

Fine Dining and Family Dining Favored by Easter Holiday Shift

Fine dining and family dining were the two best performing segments based on same-store sales growth during April. These segments were also the most favored by their incremental Easter sales. Quick service was the only other segment that achieved positive growth during the month, despite a soft Easter week.

Consumer Spending Softened, Positive Economic Outlook Remains for Restaurants

“Despite what looked like a strong first quarter expansion in the economy, there were some warnings in the latest GDP report,” commented Joel Naroff, president of Naroff Economic Advisors and Black Box Intelligence (formerly TDn2K) economist. “Most importantly, the growth in consumer spending was the weakest in four years. There has also been a decline in the year-over-year growth in retail sales at restaurants. Is this softening worrisome? Maybe not. Incomes are still expanding moderately, consumer confidence is high and job gains remain strong. Thus, personal income growth is solid enough so that restaurant sales should improve. What is likely happening is the rebound in demand that began in 2018 and accelerated this year, is simply moving back toward sustainable levels.”

“Barring an all-out trade war, the economy should continue growing solidly the rest of the year. As labor markets tighten further, wage gains and household demand should pick up. Indeed, the only dark cloud is the elongated poor weather patterns that have restrained typical spring spending patterns. Since no one really knows how to forecast the weather, if we assume normal summer conditions, restaurant sales should accelerate.”

Rising Employee Vacancies Pose Threat to Restaurant Performance

Employee staffing issues give restaurant operators little reason to celebrate. Black Box Intelligence (formerly TDn2K) studies continue to feature service as the one consistent differentiator for top performing brands based on sales growth. Even if other attributes of the restaurant experience, such as food and ambiance, have fluctuated in relative importance, superior execution on service remains at the heart of what successful restaurant brands do consistently.

Yet, most companies are facing the toughest challenges in their history when it comes to staffing their restaurants, unquestionably at the cost of subpar service levels. According to Black Box Intelligence (formerly TDn2K)’s Workforce Index, vacancies have increased at a relatively consistent rate over the past several quarters as the number of unfilled unit level positions across restaurants escalates. During the first quarter of 2019, 35 percent of companies reported an increase in their unfilled management positions, while only 12 percent were able to reduce their vacancies. 38 percent of companies had an increase in their unfilled hourly employee positions and only 10 percent of them made any progress reducing their vacancies.

The drivers behind these staffing difficulties continued their pressure on the industry during March. Rolling 12-month turnover for both restaurant hourly employees and managers increased again, adding to the already historically high turnover rates experienced by the industry in recent quarters. Additionally, the industry continues to create new jobs that need to be filled at a rapid pace. Year-over-year growth in the number of restaurant employees grew by 2.7 percent during March, an uptick from the 2.6 percent growth rate reported for February.


Black Box Intelligence (formerly TDn2K) is the leading insights & knowledge provider of restaurant industry human resources, financial performance and consumer insights data through their products Workforce Intelligence (formerly People Report), Financial Intelligence (formerly Black Box Intelligence) and Guest Intelligence (formerly White Box Social Intelligence). Black Box Intelligence (formerly TDn2K) allows organizations to leverage benchmarked data to achieve best-in-class performance results. Black Box Intelligence (formerly TDn2K) currently tracks, analyzes and benchmarks the largest database of real restaurant data in the US that includes 300 companies, 2.6 million employees and nearly $72 billion in annual revenue. Black Box Intelligence (formerly TDn2K) also produces the Global Best Practices Conference held annually each January in Dallas, Texas.



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