The restaurant industry’s sales in Q3 slipped into actual year-over-year contraction for the first time in two years.
This continues the gradual slowdown that has been witnessed since the beginning of the year, with same-store sales growth of -0.4%.
Same-store traffic growth in the third quarter was -3.5%, the worst result in the last two years and the only time guest counts declined by more than 3% percent during the same period.
The update comes from Black Box Intelligence data from TDn2k, based on weekly sales from over 31,000 locations representing more than 170 brands and $72 billion in annual sales.
Tdn2k also predicted that sluggish sales will likely continue through the fourth quarter, particularly due to the weakening economic conditions as well as the fact that the industry is lapping over strong same-store sales growth in the fourth quarter of 2018.
Victor Fernandez, vice president of insights and knowledge for TDn2K, said: “This is something we were expecting given the underlying relentless erosion of guest counts and the fact that the industry was headed towards tougher previous year sales comparisons as we went into the second half of 2019.
“However, if we stand back and look at the industry from a longer-term perspective, things have not changed much.
“Same-store sales growth calculated over two years has remained positive the last four quarters. At 0.7 percent for the third quarter of 2019, it doesn’t show much of a decline from the average 0.8 percent recorded for the first three quarters of the year.”