Restaurant sales growth remains strong year-over-year, but the last two months of the year showed there is some slowdown already in effect. Same-store sales growth was +4.8% in December, an acceleration of +1.5 percentage points compared to November’s year-over-year results. However, these two months were the weakest for restaurant sales growth since the industry saw a rebound back in August of 2022. Average sales growth for November and December was +4.1%, compared with a stronger +5.1% average for the period between August and October.
August saw a reversal in the upward momentum the restaurant industry’s sales and traffic had been riding in recent months. Amid a rising number of COVID cases and wide media coverage of its Delta variant, sales growth was 6.1% during the month, a drop of 2.1 percentage points compared to July’s strong sales growth. This was the softest sales growth reported for any month since May, and the worst traffic growth in the last three months. Traffic growth was -5.4% during August.
The industry achieved stronger 2-year sales for the second consecutive month in April. Same-store sales growth was 6.8% on a 2-year basis in April, an improvement of 4.6 percentage points from the 2.3% 2-year growth reported for March. This is optimistic news for the industry as April became the best month for restaurants based on sales growth in over three years. Although sales have recovered to pre-pandemic levels, 2-year same-store traffic growth was -4.2% in April.
January was encouraging for the restaurant industry. With same-store sales growth of -4.9% and traffic growth of -12.2%, it was the best performance for restaurants since the beginning of the pandemic almost a year ago. This is good news for an industry that struggled the last two months of 2020, as sales and traffic growth worsened compared to the COVID-era peak achieved in October. Likely contributing to some of the consumer pent up demand for restaurant spending was a combination stimulus check distribution, a sense of optimism from turning the page on 2020 and the increased prospect of additional government aid soon.
The fourth quarter was not good for restaurant sales; each month posted worse same-store sales growth than the previous month. By December, same-store sales growth fell to -13.3% year-over-year, the worst month for the industry since July. Same-store traffic growth for the month was -18.6%, also the worst performance in the last five months.
The restaurant industry’s performance continues improving with October posting the best same-store sales growth results since the beginning of the pandemic. But there are some reasons for concern that the industry’s recovery has stalled in recent weeks and may be a sign of things to come. October’s same-store sales growth represented only a small improvement from the -8.1% growth reported for September.
For an industry that was among the hardest hit by the pandemic, September brought some welcome good news. The sales recovery continued into September, which at -8.1% same-store sales growth, became the best performing month since February (before the pandemic hit restaurant sales at a national scale).
