March Sales Improve, But Not For Everybody


The good news is that restaurant sales improved in March.

The bad news: They're not exactly flourishing. Traffic is still a problem, and some types of concepts have it worse than others.

That's the conclusion from a pair of restaurant sales trackers out this week. The first came from Black Box Intelligence, which said that same-store sales at restaurants grew 0.7 percent in March.

That's far better than either January or February, when comp sales fell, due largely to weather. In February, for instance, Black Box said that same-store sales fell 0.7 percent.

Indeed, despite the March improvement, sales still struggled in the first quarter, falling 0.2 percent, according to Black Box. Weather was brutal in many parts of the country, and several franchisees we spoke with concurred—one operator, who has stores in the Northeast and Midwest, called the first two months of the year a "disaster."

March sales weren't enough to overcome those problems. And weather isn't the only problem. Traffic fell 1.2 percent in March, according to Black Box, and fell 2.2 percent for the first quarter. Both numbers were "sequentially" better than February and the fourth quarter, respectively, but the industry still struggles to attract customers. "The industry's overall same-store sales issues run deeper than simply having experienced a very bad winter," Black Box Founder Wally Doolin said. "The real problem is rooted in the declining same-store traffic, which the industry has been experiencing for years."

The biggest problem is, you guessed it, casual dining concepts, which struggled in March, according to Knapp Track Index, which monitors same-store sales and traffic at casual dining chains. Same-store sales fell 1.7 percent at dine-in eateries for the month, and traffic fell 3.6 percent. That's actually the same as Knapp's February numbers—casual dining traffic fell 3.6 percent that month, too.

At least part of the month's struggles were due to tough comparisons—traffic increased 1.1 percent in March 2013, according to Knapp. And so the numbers might not be as bad as they appear. Still, the improving weather should have had a more discernable impact on those chains, and that doesn't appear to have been the case.

The economy remains unfavorable. There's tons of competition. Restaurants are overbuilt. And in spite of a belief in "pent-up demand" for restaurants there are plenty of people opting for other means of dining.

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