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Log In / Register | Dec 19, 2014

The Perfect Storm

Few things get our email wires humming like a broad downdraft in the U.S. restaurant industry. We had just this kind of flurry last week as we published our Week 4, 2013 numbers for SalesTrack® Weekly, NPD’s national, weekly foodservice industry performance tracker. After 87 weeks (aside from calendar anomalies) of same store  sales growth, our 50 chains, in aggregate, posted a -4% decline in same store sales.

This came just as the economic news brought us a decline in GDP in the 4th quarter and continued positive but not exciting growth in employment…along with more people re-entering the job market and nudging up the unemployment rate.

BUT January was awful weather-wise with a sharp drop in temperatures across much of the country (although not in Fremont, CA…foodservice blog headquarters!).

AND, Consumer Confidence  dropped a “surprising” 8 points

AND gasoline prices rose at the fastest rate in nearly two years.

AND, one of the background drivers of the restaurant business is the two-week and monthly paycheck cycle.  Many kinds of restaurants get their big bump of the month as consumers on a monthly cycle get their paychecks.  The same is true on a smaller scale on a two week cycle.  The decline in same store sales came in the week following the first paycheck of the two week cycle in 2013. The first paycheck for which the payroll tax amnesty was no longer in effect.  The first paycheck with a de facto (even if it was actually a return to base line level) decline due to taxes.

AND, if you were conscious during mid-January you had to be aware that Google Flu Trends were streaking through the “intense” zone creating great news stories about the peaking trend that likely drove it to higher peaks.  Along with the searches for “flu”, the incidence of flu cases was ascending rapidly.

Add these together and you get a bunch of reasons why no segment in SalesTrack Weekly, except fast casual, posted same store sales gains.  NO sandwich chain grew, which has only happened a handful of times in the 20 years NPD has run the foodservice market research service and is the first such event since February, 2010.

Now, what’s in store for the first week of February?

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