July was another month of under-performance in the restaurant industry, according to a new report from TDn2K.
According to the report, same-store sales growth dropped one percentage point from June to -1.0%, the first time since September 2017 that the industry has seen sales growth numbers this low.
Meanwhile same-store traffic growth was -4.0% during July, representing a 0.8% decline from June’s year-over-year growth and the weakest traffic growth for the industry since August 2017.
The report also revealed that year-over-year to-go sales growth dropped 2.0 percentage points compared to June.
And it highlighted that the outlook for the industry remains uncertain, partly driven by political factors with the looming threat of a recession which could be brought about by a possible trade war.
A continued slowdown in same-store sales growth is likely, according to the report, but a rebound is expected from the plunge in July, particularly in to-go sales.
Victor Fernandez, the vice president of insights and knowledge at TDn2K, said: “Without a doubt, we are experiencing a year-over-year slowdown in restaurant same-store sales coming, in part, from lapping over tougher sales comparisons dating back to Q2 2018.
“But July’s unique challenges for chain restaurants likely play a significant part in the downfall we saw in the results.
“Once a significant portion of restaurant guests are taken off their usual routines, they tend to shift some of their spending toward other food-at-home or food-away-from-home options.”