Restaurant Industry Weekly Traffic
Quick-Service Restaurants Face the Unexpected: A Traffic Lull
QSR traffic looks like it will be down three months in a row. In the first half of October, we observed a significant drop in the Quick Service Restaurant (QSR) segment traffic. Traffic decreased by 445bps, resulting in an 8.6% decline. This contrasts with September's smaller decline of 4.23%. Compared to a 2-year average, we've seen a shift from flat to a decrease of 50bps.
The New Age of Casual Dining Traffic
Excluding just two months this year, there has been a consistent decline in CDR traffic. October, unfortunately, continues this trend. In a silver lining, the first half of October saw a modest uptick in sales for Casual Dining establishments, even though traffic slipped by 4.1%; this is a moderate improvement compared to September's decline of 5.9%. There's a promising uptick when we compare the current figures to a 2-year average. The industry has shown an improvement of 35 bps).
Eating and drinking places
In contrast to what we are seeing on the October traffic, September represented the seventh consecutive month of restaurant sales growth.
In September, consumers emphasized restaurant spending, driven by high pent-up demand and a stable labor market. Eating and drinking establishments reported a 0.9% sales growth from August, marking a seven-month growth streak with sales totaling $91.9 billion. For the third quarter, there was a significant 9.7% increase in restaurant spending compared to the same period in 2022. This growth rate was over four times the 2.2% growth in non-restaurant retail sectors. Additionally, restaurant sales witnessed a 3.0% growth in 3Q23, even after adjusting for menu price inflation.
Highlights:
- September's Restaurant Prioritization: Consumers preferred restaurant spending, supported by solid demand and a resilient labor market.
- Monthly Sales Data: Sales at eating and drinking places reached $91.9 billion in September, a growth of 0.9% from August.
- Consistent Growth Trend: September marked the 7th consecutive month of sales growth for eating and drinking establishments.
- Quarterly Sales Increase: In Q3, restaurant consumer spending surged 9.7% YoY.
- This growth is notably robust compared to the modest 2.2% sales increase in non-restaurant retail sectors for the same period.
- Real Sales Growth: After accounting for menu inflation, sales for eating and drinking places grew by 3.0% between the third quarters of 2022 and 2023.
Bricks Meets Clicks September Summary:
In September, the U.S. online grocery market witnessed a 3.1% drop compared to the previous year, finishing at $7.5 billion, per the Brick Meets Click/Mercatus Grocery Shopping Survey. Factors such as decreased order frequency and reduced spending per order played significant roles. However, the growth in the number of monthly users indicates sustained interest in online grocery shopping. David Bishop from Brick Meets Click emphasized the growing market share of Pickup and Walmart due to the various advantages they offer.
Highlights:
Sales Decline: The online grocery market ended with sales of $7.5 billion in September, a 3.1% decline YoY.
Order Frequency Drop: The average orders per monthly active user (MAU) decreased to 2.31, an 8% decline YoY. Mass retailers' order frequency dropped 4%. Amazon's order frequency decreased by 7%. Supermarkets' order frequency declined nearly 13%.
Average Order Value (AOV) Constrained: Overall, AOV dropped about 5%. Pickup saw the most significant AOV decline. Supermarket AOV remained consistent, while Mass AOV decreased by 9%.
Rise in Online Shoppers: Households making at least one order increased by nearly 11% YoY. Supermarket MAU base grew under 1%. Mass MAU base (with Walmart leading) surged by 20%. The total increase in MAU led to a nearly 2% rise in total order volume.
Cross-shopping Growth: Rates between Grocery and Mass grew, ending at 28%, a 40 basis point increase YoY.
Repeat Intent Decline: Grocery repeat intent dropped 340 bps to 52%. Mass repeat intent declined by 860 bps to 57%.
Online Market Share Increase: Online sales represented 12.6% of total weekly grocery spend by September's end, a growth of 160 bps YoY. Excluding Ship-to-Home, the combined share of Pickup and Delivery was 10.5%.
