Today, RUTH reported that 3Q09 same-store sales growth declined 24%. The chart below is just plain ugly, but I am not posting it to show just how abysmal the company’s trends are, but instead, to make a comment about the upscale segment of restaurants in general. Management stated that it has held market share through the first nine months of the year relative to Malcolm Knapp’s upscale dining index. A company cannot maintain share with year-to-date same-store sales down 22% unless that segment is at risk of going away. If there is any truth to this statement, fine dining restaurants are in real danger.
I do not quite understand why MRT traded up today following this news. MRT is scheduled to report 3Q09 numbers next week. The company’s 2Q09 same-store sales growth declined 26.1% so the company is in a similar position to RUTH from a demand standpoint.