Sales Growth Streak Continues for Restaurants Despite Traffic Losses

For the last 11 consecutive weeks, restaurant traffic has declined. Still, restaurants are managing to hold on to positive sales growth year over year, according to Black Box Intelligence’s latest Restaurant Industry Performance Pulse.

Helping restaurants cling to positive sales growth is the “persistent growth” in average guest checks as inflation keeps ticking up prices. The Bureau of Labor Statistics’ latest consumer price index shows full-service meal prices hit a record high in April, rising 8.7 percent over the previous 12 months and marking the most significant 12-month increase since the index started in 1997. Limited-service meal prices were up 7% over last year.

During the first quarter of the year, traffic was down 2% from last year but up 1% from the first quarter of 2020 when the pandemic began, according to The NPD Group.

For the week ending May 22, sales growth slowed but remained positive. Traffic growth also dropped further, “deteriorating at twice the rate of the decline in sales,” says Black Box. Off-premise sales are also slowing. While the share of off-premise sales as a percentage of total sales continues to be higher than pre-pandemic levels, the rate at which off-premise sales are increasing year over year has slowed “considerably” and is now negative for full- and limited-service restaurants.

The best-performing segments based on sales growth for the week ending May 22 were fine dining, upscale casual and family dining. The segment with the softest sales growth was quick service, followed by casual dining.