Malcolm Knapp reported January same-store sales and traffic results of -2.3% and -2.8%, respectively. For same-store sales, this represents a decline of 3.2% on a two-year average basis, which marks a significant improvement from December’s two-year number of -7.0%. The traffic number shows a clear improvement in trends as well; traffic improved 330 bps from December 2009 on a two-year basis. As Knapp points out, January trends benefited from New Year’s Eve falling in the first week, the super bowl shift into February this year, and the increased redemption rate of gift cards during the month.
January was the second month in a row where comparable store sales exceeded guest counts. From May through November 2009, largely due to heavy discounting, guest counts had exceeded comparable store sales.
There has been a surge in consumer confidence from January 2009; as Knapp notes, the January 2010 Consumer Conference Index is up 18.5 points compared to a year ago. However, consumer spending is not reflecting this turnaround. High unemployment, combined with the increasing savings rate and inflationary headwinds (especially at the pump), is taking share of wallet from consumer discretionary companies. However, as PFCB management has noted recently, “expense account” corporate spending may be improving and providing a boost to higher-end casual dining trends.