BLACK BOX
Same-store sales growth was -3.4% YoY in November, and traffic was -4.3%.
When comparing November against the growth rate reported for September and October, sales are 1.8% lower. This November's sales growth is the lowest posted by the industry since July's +0.3%. Same-store traffic growth was -4.3% in November, down by 1.1% relative to the previous month and the worst industry outcome since July. As Black Box said in a statement, "November seems to be a good preview of what trends could lie ahead, as traffic softens, bringing moderation in sales growth. Once the very high menu price increases start diminishing, as is expected, it will be increasingly harder to post strong positive same-store sales growth, as was the case for most of 2022. As restaurant guests continue to face the challenge of inflation, even in a reduced capacity, their paychecks will not be able to carry them as far as they used to."
ONLINE Ordering Slowdown
Online ordering company ChowNow is laying off 40 people, or about 10% of its staff, as demand for delivery continues to level out.
It's the latest round of job cuts this year for the Los Angeles-based company, which laid off 20% of its workforce in July. It had 500 employees at that time. "These actions are never taken lightly, but we believe they are necessary to ensure the long-term sustainability of the company and our commitment to supporting local restaurants," ChowNow said in a statement. In what has become a familiar tale in restaurant tech this year, companies that proliferated earlier in the pandemic are downsizing as consumers return to more normal dining behaviors and investment capital dries up. ChowNow, which provides online ordering and delivery services for independent restaurants, is one example. DoorDash, which laid off 1,250 people earlier this month, is another. In July, ChowNow CEO Chris Webb described the economic environment as a storm that the company planned to weather by cutting costs. That was during a wave of tech layoffs inside the restaurant industry and out. Other companies to cut jobs at the time were Nextbite, Lunchbox, and Sunday. ChowNow was founded in 2012 and worked with about 20,000 local restaurants. With lower commissions and more data-sharing, it aims to be a more restaurant-friendly alternative to apps like DoorDash and Uber Eats.
OPEN TABLE
We remain bearish on the food distribution space, and the OpenTable data shows a slowdown at independent restaurants. OpenTable shows US full-book restaurants were down (6.4%) in December compared to 2019. November was down (2.67%) vs. 2019.
