WEEKLY SALES
For the week ending October 25, YoY SSS saw no growth compared to previous weeks. The decline in SSS speaks to a sales recovery that has significantly slowed in October. A driving factor behind the slowdown may be the spike in COVID-19 cases, which started trending up again around the same time frame in October. SSS and traffic during the week were the second-worst results in the last six weeks. Dine-in sales growth likely stopped helping as dine-in sales growth flattened since mid-September and has not seen much improvement since. Although still growing at historically high rates for full-service restaurants, off-premise sales have continued to taper off slowly. After seeing dine-in sales growth improve steadily since April, the last six weeks have begun to show the upward momentum slowing for limited-service restaurants. Off-premise sales growth remains high for limited-service and continues to be a key driver of its success. All regions of the country experienced negative comp sales growth during the week.
The Southeast, Southwest, the Western region, and Mountain Plains were the country's best-performing regions. The most significant sales declines were California, New England, New York-New Jersey, and the Midwest.
OCTOBER SALES
October was the best month for restaurant same-store sales growth since February; however, as Black Box notes, "the biggest headline of the month is how much the recovery slowed down."
In October, same-store sales declined -7.5%, which represented a 0.6% improvement from September. By contrast, same-store sales improved, on average 3.6% during each of the months between July and September. October's same-store traffic declined -13.7% and was also the best result for the industry since February but represented a modest 0.8% improvement over September. Black Box noted that "as the number of COVID-19 cases started rising in many areas of the country and concerns that a new wave of infections expansions of dine-in capacity has slowed." October may be a sign of things to come as we head into the seasonally slower winter quarters.
Year–over–year growth in average check per guest was 6.5% in October, more than double the growth recorded in recent years. Furthermore, this average check per guest growth has accelerated in recent months, with year–over–year growth averaging 6.8% for August through October, compared to the average 5.7% growth recorded between April and July as seen in the chart below.
Growth in spending per guest continued rising steeply for limited-service segments in October. Year–over–year growth was more than triple the guest check growth recorded for all of 2019 for quick service and more than double for fast-casual. Though not at the same rate of increase, full-service segments also continued to post strong growth in average guest spending during October compared to their 2019 norm with one exception: fine dining. This segment's average spending per guest has been increasing at a much slower pace than for the rest of the industry. In October, it was even lower than average check growth for all of 2019.
In October, same-store sales growth for limited-service brands was 1.1%, while growth for full-service was -14.4%. Quick service continues to be the clear winner in this environment. The segment has now posted six consecutive months of positive same-store sales growth. October's growth was the second strongest month since the beginning of the pandemic. The segment continues greatly outperforming 2019 sales growth and has maintained its superior performance since March.
OFF-PREMISE SALES GROWTH REMAINS STRONG
Growth in off-premise sales remains very strong, especially for full-service restaurants. But even if off-premise sales are still up over 100% year over year for full-service, they have been steadily declining since the 200% plus growth at the height of the pandemic. In the case of limited-service brands, off-premise sales are still growing at a pace of more than 25% year over year, just slightly lower than what has been reported in recent months. As a result of these continued high off-premise sales rates, dine-in sales as a percentage of total sales remain lower than the pre-pandemic norm for full-service and limited-service brands. On average, in full-service, 87% of total sales were for dine-in in January and February. For October, dine-in sales averaged only 70% of the total. In limited-service, the pre-COVID norm was for almost 30% of all sales to be dine-in, while dine-in represented only 16% of total sales during October.
