It was another month of mediocre performance for restaurants, according to TDn2K’s monthly survey of the industry. 

Same-store sales fell for the second month by just under one percent (-.71 percent), it’s slightly better than July’s -.96 percent decline, but marks another month of acceleration in the wrong direction compared to the three-month average of -.56 percent. Traffic did slightly better than July too, but not by much. Traffic declined by 3.87 percent, not a great turnaround from July’s 4 percent decline. 

According to the research and analytics firm, the month does lap a moderately strong period of 2018 (when it saw nearly 2 percent sales growth) but there’s not much to explain the decline. 

“This occurrence of two consecutive months of negative sales growth could not be blamed on any external factors, such as the previous time in 2018 when weak sales were largely due to extreme winter weather,” according to researchers at TDn2K.

Traffic has become a huge problem, though as vice president of insights and knowledge, Victor Hernandez said, it’s not completely dismal. 

“There is little comfort in knowing the industry keeps losing guests at the same pace as it has been for the last year,” continued Fernandez, “but at least the bleed is not getting worse.”

The cause of the ongoing traffic decline, however, is a nebulous collection of many factors. There are still too many restaurants but nobody wants to slow growth or narrow their deal pipeline. Some are looking to international markets to get it, but listening to any of the quarterly results or watching unit counts tick up, every brand looks as if it will continue what restaurant analyst Malcolm Knapp calls “a game of chicken,” exactly what brands did in the explosive growth era of the 80s when 130,000 fast-food outlets seemed like a lot. Now, according to preliminary numbers from the Franchise Times Top 200 (due in October), there are there are 281,100 locations just among the Top 200 restaurant brands. 

And in the face of recession worries and most recently include an inverted yield curve, scary indicators in auto sales and shipping (not to mention that trade war), prices keep going up. According to the Bureau of Labor Statistics, prices for food away from home are up 3.2 percent as of July. But whether people are cutting back in the face of higher prices or the increases just aren’t enough to cover the traffic declines due to other factors remains to be seen. 

Could September fare better? Not likely, since a notable spike in results in the third quarter of 2015 that includes September, it’s been a mixed bag that generally trends down. There’s a bump in sales from school returning to session, but that’s often balanced by volatile fall weather—and Dorian is just one storm in the busiest month for ugly weather. 

The good news? Fine dining and, to a lesser extent, family dining continue to shine. The former is on a two-year stretch as the strongest performing category of the industry and the latter has been growing sales significantly since 2018, according to TDn2K. 

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