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Restaurant Industry Snapshot™ November, 2019

Winter is Coming: Weak Same-Store Sales Ahead Following Late Thanksgiving Holiday


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Comp Sales & Traffic

Comp Sales

rolling 3 months

Comp Traffic

rolling 3 months

The numbers show an increase in same-store sales growth for the industry in November. However, this growth is largely due to the late Thanksgiving holiday in 2019. This year, a regular week in November was compared to the holiday week in 2018, thus elevating same-store sales numbers enough to raise the overall comp sales for the month to 1.61 percent. The decline in same-store sales growth from the Thanksgiving holiday will be noticed during the month of December, due to the reporting convention of Financial Intelligence (formerly Black Box Intelligence).

The timing of the holiday had the same effect on traffic. Traffic growth during November was -0.9 percent, a considerable increase from October. Nonetheless, the appearance of growth was assisted by the holiday shifting a week later than the previous year. The first three weeks of the month are more in line with what the industry is experience traffic-wise, with a growth rate of -3.1 percent.

Regional & Market Performance

Positive Markets 140 | 71% Negative Markets 58 | 29%

Strongest Region

Mountain Plains
  • Sales 3.60%
  • Traffic 0.61%

Weakest Region

  • Sales -0.15%
  • Traffic -2.71%

Regional and market performance improved during November for the same reasons the industry saw growth in same-store sales. Texas was the only region out of 11 that experienced negative sales. The remaining ten experienced positive numbers. The Mountain Plains was the strongest performing region during the month.

71 percent of local markets were positive during November. 29 percent experienced negative market sales. In October, only 53 percent of local markets had positive sales.

The Restaurant Workforce

job growth & turnover

Year/Year Job Growth*


Manager Turnover*

Q4 '19
Roll 12

Hourly Turnover*

Q4 '19
Roll 12
*Black Box Workforce Intelligence, November, 2019 Release

Saturation of restaurant units combined with low unemployment rates means the staffing headaches faced by operators persist. Turnover rates no longer seem to be climbing; however, they remain at historically high levels.

Turnover rates seem to be stabilizing for managers as well, with alternating months of rising and decreasing. As the economy continues to grow, albeit at a slower pace, the strain of finding and retaining employees will continue to be a struggle headed into 2020.

Winter is Coming: Weak Same-Store Sales Ahead Following Late Thanksgiving Holiday

Topline numbers show robust restaurant sales growth during November. This was largely due to a favorable shift in the Thanksgiving holiday. Same-store sales growth was 1.6 percent in November, which represents the third consecutive month of positive sales growth and the strongest since January. This report comes from Financial Intelligence (formerly Black Box Intelligence) data from Black Box Intelligence (formerly TDn2K), based on weekly sales from over 31,000 and $72 billion in annual sales.

According to Financial Intelligence (formerly Black Box Intelligence)’s reporting convention, since Thanksgiving was celebrated late in November this year the holiday was considered as occurring in December. Thanksgiving typically represents lower sales volumes for most industry segments. While restaurant sales were lower for November of 2018, November of 2019 did not include the same holiday headwinds. This effect will be reversed in December, which is expected to be weak from a same-store sales perspective.

“To better understand November, we need to look at what happened during the first three weeks of the month,” commented Victor Fernandez, vice president of insights and knowledge at Black Box Intelligence (formerly TDn2K). “Two of the first three weeks of the month had negative same-store sales. Additionally, the month-to-date growth rate by the end of the third week was -0.3 percent. But comparing a regular week to Thanksgiving week last year meant the fourth week of the month had positive same-store sales growth in the double digits, which was enough to elevate the month’s overall growth rate by almost 2.0 percentage points.”

Favorable Holiday Shift Not Enough to Grow Traffic

Despite the favorable comparison due to Thanksgiving rolling into December this year and the fact that same-store traffic also achieved double-digit growth during the last week of the month as a result, the industry continued losing guests at an accelerated pace. Same-store traffic growth for the month was -0.9 percent. Even though overall this is the best month since January, the traffic growth rate of -3.1 percent for the first three weeks of the month provides a clearer view of November’s traffic performance.

Fine and Family Dining Hurt by Holiday Shift

The best performing segments during November were those whose sales are the most negatively affected by Thanksgiving: fast casual, upscale casual and casual dining. In the case of most of the concepts in these segments, Thanksgiving means significantly less traffic and even closed locations as consumers gather at home for meals with friends and family.

But for other segments, namely fine dining and family dining, this holiday actually means an increase in sales as many families travel, get together and celebrate by dining out. For these segments, the delay in the holiday meant underwhelming same-store sales performance during November and especially during the last week of the month. The expectation is for both of these segments to offset these results with strong same-store sales growth in December.

Soft Income Growth and Increased Holiday Shopping = Flat Restaurant Demand

“With trade pressures easing, economic growth has begun to stabilize at the expected modest to moderate 2.0 percent pace,” stated Joel Naroff, president of Naroff Economic Advisors and Black Box Intelligence (formerly TDn2K) economist. “So far, fourth quarter data has been disappointing and while online Black Friday sales were strong, brick and mortar activity fell sharply. That points to decent, but not great, overall holiday shopping. Unfortunately, with consumers making more purchases from home, a trend that shows no signs of lessening, eating out is likely to be limited.”

“The more moderate pace of consumption implies the softening in hiring and income growth should continue. That is likely to be the case even if a so-called ‘phase one’ China trade agreement is signed sometime over the next few months. It eases tensions but doesn’t significantly change the economic fundamentals. And it isn’t certain an agreement will happen. Consequently, expect household spending to expand moderately at best over the next six months, assuming a modest trade agreement. That means restaurant demand is likely to be largely flat.

Industry Continues to Grow, Adding to Mounting Staffing and Retention Pressures

Restaurants continue to face significant staffing pressures. Finding and retaining employees remain among the biggest obstacles operators struggle with. The problem lies in part in the fact that, while unemployment remains at the lowest levels experienced in the last fifty years, chain restaurants continue to expand and add to their number of locations. Net growth in number of chain restaurant locations was 1.6 percent year over year according to Financial Intelligence (formerly Black Box Intelligence)’s Market Share Report. Restaurants have had to keep up with this growth from a staffing standpoint amid the most difficult labor market in decades.

Additionally, turnover rates for restaurant employees and managers continue to be at all-time highs. In the case of the hourly crew, turnover increased slightly in October after a small drop in September. It seems the industry has reached its ceiling in terms of hourly employee turnover and is now moderating. The relentless climb in turnover rates may be over, but considerable easing of turnover pressures are not expected considering the tight job market.

The story is similar for restaurant managers. We have now experienced three consecutive months in which management turnover has alternated between rising and decreasing, also suggesting it is stabilizing at its current levels.

Looking Ahead

There’s good reasons to be pessimistic about same-store sales growth for restaurants in December. First, at 2.1 percent sales growth, December of 2018 was tied for the strongest month last year, which means a tough comparison as we wrap up the year. Second, the shift of Thanksgiving into December of 2019 converts from tailwind to headwind this month. Expect for casual dining, upscale casual and fine dining to have abysmal sales and traffic growth numbers.

Tough year-over-year comparisons and a softening economy carry over into next year, which means a significant lift in restaurant spending is unlikely.

From a workforce standpoint as long as the economy keeps growing (even if at a slower pace) and labor markets remain tight, restaurant operators will continue to struggle with finding and keeping enough qualified employees in the new year.


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), Guest Intelligence (formerly White Box Social Intelligence) & Consumer 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 over 300 companies, over 2.8 million employees and $72 billion in annual revenue. Black Box Intelligence (formerly TDn2K) also produces the Global Best Practices Conference held annually each January in Dallas, Texas.