The year continues to be disappointing for the restaurant industry as February again resulted in negative same-store sales. This represents the third consecutive month in which this key metric has shown decreasing sales, which hasn’t occurred in over three years. This is clearly evidence of the predicament the industry faces during this unusually cold winter. This was reported by Financial Intelligence (formerly Black Box Intelligence) and Workforce Intelligence (formerly People Report) through The Restaurant Industry Snapshot for February, released this week.

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Same-store sales growth in restaurants was -0.7% during February, which is a small 0.2% improvement from the -0.9% rate reported for January. “As has been the case with the previous three months, weather has been the key factor driving down sales for the restaurant industry.” commented Victor Fernandez, Executive Director of Insights and Knowledge for Black Box Intelligence (formerly TDn2K), parent company of Financial Intelligence (formerly Black Box Intelligence) and Workforce Intelligence (formerly People Report). “However, the results for February and the slight improvement from January are deceiving. The reality is February of last year was a horrible month for the industry as a perfect storm of rising payroll taxes, political uncertainty and bad weather hit the country and drove same-store sales to almost -5.0% for the month, the worst results since the period immediately after the end of the recession in 2009. Under that perspective, the -0.7% posted by the industry in February 2014 is very concerning when analyzed on a two year basis.”

As has been reported in the past, declining same-store guest counts continue to be the main problem for restaurants. February posted same-store traffic growth of -3.2%, the second worst growth rate in the last 12 months. Although same-store sales improved slightly over January, traffic actually worsened by 1.0% on a same-store basis. “As was the case with sales”, continued Fernandez, “to keep these latest results in perspective we need to remember that we are calculating those growth rates compared with one of the worst months we have seen in recent years; February 2013 posted guest count growth of about -6.0%. The reality is February of 2014 was very bad for the industry, but this got obscured by the fact that February 2013 was also terrible.”

The Restaurant Willingness to Spend Index, published by Consumer Edge Research, posted a value of 94 for the second consecutive month in February. This means that the value of this index has been over 90 for 7 of the last 8 months, which hasn’t been seen in more than 3 years. “We believe there continues to be pent up demand that is not materializing in additional restaurant visits and sales due to the winter storms. However, the effect on consumers’ wallets due to the rising heating costs this season is a concern for the next few months” said Fernandez. The Thomson Reuters/University of Michigan consumer confidence index improved slightly during February, supporting the idea that consumer spending may pick up during March and April as weather starts becoming less of a barrier.

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According to the latest results published by Workforce Intelligence (formerly People Report), the growth of the industry has been fueled primarily through new restaurant openings, which is reflected in the 3.3% year-over-year job growth reported for January, which reflects a small 0.1% increase from December but more importantly, is the third consecutive month with jobs growing at a pace of over 3.0%. Staffing pressures are also being reflected in turnover, which again continued its upward trend for both restaurant managers and restaurant hourly employees on a rolling 12-month basis.

The Restaurant Industry Snapshot is a compilation of real sales and traffic results from over 180 DMAs from 100+ restaurant brands and over 17,000 restaurants that are clients of Financial Intelligence (formerly Black Box Intelligence), a Black Box Intelligence (formerly TDn2K) company. Currently, data is reported in four distinct segments: casual dining, upscale/fine-dining, fast casual, and family dining. Financial Intelligence (formerly Black Box Intelligence) is a sister company to Workforce Intelligence (formerly People Report), which tracks the workforce analytics of one million restaurant employees. The Restaurant Industry Snapshot also includes the Restaurant Industry Willingness to Spend Index from Consumer Edge Research, which is a monthly household survey of more than 2,500 consumers. Consumer Edge Insights is a marketing partner of Financial Intelligence (formerly Black Box Intelligence) and Workforce Intelligence (formerly People Report).