Restaurant industry sales rise in February for second straight month: Black Box

Warm weather benefits restaurants ahead of U.S. Coronavirus outbreak

Comparable U.S. restaurant sales in February were once again positive, according to Black Box Intelligence. Comparable sales increased 0.3 percent. This follows a 2.2 percent increase in January, when restaurants benefited from unusually warm weather and lapped a colder winter last year.

This would be great news against the backdrop of the Coronavirus; however, Victor Fernandez, vice president of Insights and Knowledge for Black Box Intelligence, cautions against misinterpreting the results. The average comparable sales growth for the trailing 6 months is only 0.4 percent, even with January’s growth of 2.2 percent. However, excluding that anomalous January result, average comparable sales for the past 6 months would only be flat.

Diving into the details

Falling guest counts continue to be a challenge. According to Black Box, comparable guest traffic declined 2 percent on top of a 3.7 percent decrease in the same month last year. This has been the overall trend: Negative guest counts are lapping prior year negative guest counts. However, there’s a bright side. Restaurant brands that are growing traffic are the ones with higher “service scores in guest ratings and (ones that) excel in providing a superior overall dining experience, which includes higher ambiance guest sentiment.”

Restaurant brands that are growing their traffic are outperforming others in dine-in and accelerating off-premises business much more rapidly. This is a major reason restaurants should invest in training & service and maintain high quality standards, while also working on employee retention. Employee turnover is a challenge and is on the rise, according to Black Box data. Also, 38 percent of restaurant companies reported an increase in the number of their unfilled restaurant hourly employee positions, while 30 percent of them experienced an increase in unfilled management positions in Q4 2019.


Seven of the 11 regions that are tracked produced positive comparable restaurant sales during February. The Midwest, New York-New Jersey, New England, Mid-Atlantic, and Mountain Plains posted comparable sales better than 1.5 percent during February. These regions also experienced comparable sales above 4 percent in January, but declined in February. Typically, regions in which weather normally is more adverse during winter tend to benefit when temperatures are warmer and weather is milder than usual.

Looking ahead, economic outlook

There are factors that will have downward pressure on sales. Coronavirus Disease (Covid-19) is causing mounting fears. As more conferences and meetings are cancelled and people reconsider their spring breaks, additional hospitality and venue businesses are sure to be impacted. Add to that several sectors of the travel industry, and that would trickle down to restaurants. Black Box also points to the election year as a factor that can cause uncertainty.

“Currently, it looks like the spring and summer quarters will be largely flat or even negative,” said Joel Naroff, president of Naroff Economic Advisors and Black Box Intelligence economist. “Recession estimates are in the 60% probability range. The restaurant industry would be hit not only by the economic slowdown but also the fear of congregating with others. The only good news is that once the virus is contained, people should go back to living normal lives quickly, and the recovery could be rapid and strong.”

The consumer fear factor, he added, is the big unknown. Looking ahead, the first quarter should have restaurants ending up with positive comparable sales, particularly with the benefit of January’s comparable sales increase of 2.2 percent. Economists, however, are revising their outlook for 2020 based on the outbreak of Covid-19.


According to Black Box, “On one hand, sales growth was strong during that month (March) last year (same-store sales growth in March 2019 was 1.2 percent), which provides for a tougher comparison when calculating sales growth. For reference, February’s sales growth rate in 2019 was -0.6 percent, and yet the industry was only able to post a small positive increase last month. On the other hand, as news of more cases of Coronavirus become more prevalent and continue to be shared, some negative effect on restaurant sales becomes unavoidable.”

Black Box Intelligence, formerly known as TDn2K, provides insights based on data from financial intelligence from over 47,000 restaurants and $75 billion in annual sales. The data set is robust, representing 300 restaurant companies with 2.8M employees.

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