Restaurant Sales Slide; Hiring, Retention Remain Concerns

Restaurant sales continue to be on the decline, with the industry not reporting a month of positive sales since February 2016.

According to a press release, results from data by TDn2K through the Restaurant Industry Snapshot show that same-store sales in May were down -1.1 percent, a 0.1 percentage point drop from April.

But some experts say there are signs of hope: “The industry is clearly still struggling, but there is some optimism based on the latest results,” said Victor Fernandez, executive director of insights and knowledge for TDn2K.

“Both sales and traffic growth quarter-to-date at the end of May show improvements over the first quarter, and the second quarter is currently on track to post the best results we’ve seen for the industry since the third quarter of 2016.

“Additionally, restaurant sales were relatively soft last year, and the easier comps should help results,” he continued. “However, at this point, we believe the most likely scenario for the current quarter will be an improvement over recent quarters, while still suffering negative sales given the current consumer spending trends.”

Although overall sales continue to be a challenge for most of the industry, there are pockets of opportunity. Dine-in sales have been negative year-to-date, but to-go is up 2.9 percent. Sales are also up in catering, delivery and drive-thru.

May sales were weak across all segments, but fine dining was able to achieve very small positive same-store sales growth during the month. The second-best-performing segment during May was quick service, and casual dining had the weakest performance.

In addition to what they are facing in terms of falling guest counts and consumer spending, restaurants continue to deal with both staffing and retaining enough qualified workers. Turnover rates for both hourly employees and management staff increased again during April.

“The turnover numbers that we are reporting are stunning,” said Joni Thomas Doolin, CEO of TDn2K and founder of People Report. “Many of the brands that we track are already facing unsustainable levels of staffing vacancies. Most alarming is the fact that over 70 percent of employees are leaving voluntarily as opportunities for better work increase.”