Q4 2018 Industry Research

Same-Store Sales Discussion

Restaurant industry same-store sales (“SSS”) increased for the fifth straight quarter in Q4 2018 following six consecutive quarters of SSS declines. Of the 52 companies we follow, 34, or 65%, generated SSS growth, close to the 68% positive in Q4 2017.

As shown in the figure below, long-term performance is most consistent in QSR, measured over 3-, 5- and 10-year periods. Fast casual provided the most growth over the past 10 years, but most of that growth occurred more than five years ago. Casual dining led the industry with 1.7% growth in Q4 2018, continuing its bounce-back after several years of challenged results.

QSR:  The QSR segment extended its streak of positive year-over-year (“YOY”) SSS growth to seven consecutive quarters with a 0.7% increase. Mexican concepts led the segment for the 10th straight quarter with 2.8% growth. Chicken concepts lagged the segment with a 0.3% decline driven by a 1.9% decrease for Pollo Tropical, partially offset by 1.0% growth for KFC, which now has 12 consecutive quarters of growth. Domino’s (+5.6%) delivered another strong quarter in Q4, but its growth is showing signs of slowing. The Sandwich (+0.8%) and Coffee/Snack (+0.6%) segments posted modest growth led by industry leaders McDonald’s (+2.3%) and Starbucks (+4.0%), respectively.

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