Employment data released this morning by the Bureau of Labor Statistics suggest near-term strength for Quick Service and Fast Casual trends. The outlook for Casual Dining seems less positive. Employment trends within the industry suggest a possible sequential deceleration in same-restaurant casual dining sales. Knapp Track Casual Dining sales data track BLS employment growth data for the full-service and leisure and hospitality industries. Within casual dining, we are bearish on DRI, BLMN, TXRH, and BWLD.
Employment by Age
Employment growth among the 20-24 YOA cohort, which has been highlighted by many QSR and fast casual management teams as an important source of demand, accelerated to 3% year-over-year in September from 1.3% in August. Employment growth among 55-64 year olds decelerated, sequentially, in September to 3.6% from 4.4% in August. If this deceleration were to continue, it would be a negative signal for casual dining sales.
The Leisure & Hospitality employment data, which leads the narrower food service data by one month, suggests that employment growth in the food service industry may have tracked sideways-to-down in September. On a sequential basis, the Leisure & Hospitality employment data registered a month-over-month gain of 11k (second chart below). As the first chart of this post illustrates, the trend of employment growth within the Leisure & Hospitality seems to be stabilizing at roughly 2%.
- Leisure & Hospitality: Employment growth at +2.3% in September, down 7 bps versus August
- Limited Service: Employment growth at 3.9% in August, down 15 bps versus July
- Full Service: Employment growth at 2.5% in August, up 13 bps versus July