January 2020 Industry Research

Same-Store Sales Discussion

Restaurant industry same-store sales (“SSS”) increased for the eighth straight quarter in Q3 2019 following six consecutive quarters of SSS declines. Of the 50 companies reporting SSS results this quarter, 33, or 66.0%, generated SSS growth. It is worth noting that five years ago, we tracked 74 restaurant concepts and that today, only 50 report SSS as a result of many, mostly struggling, concepts being taken private.

As shown in the figure below, long-term performance, measured over 3-, 5- and 10-year periods, has been most consistent in QSR. Fine dining outperformed all other segments over the past 10 years (+37.8%); however, the segment was hit hardest by the Great Recession, so the starting point was also the lowest. QSR led the industry with 2.4% growth in Q3 2019, extending its positive streak to eight quarters.

QSR:  The QSR segment extended its streak of positive year-over-year (“YOY”) SSS growth to 10 quarters with a 2.4% increase. Sandwich concepts led the segment for the first time in nearly four years with 4.3% growth, bolstered by strong performances from Burger King (+5.0%) and McDonald’s (+4.8%). Chicken concepts repeated their positive result in Q3 with a 1.8% increase, driven by Popeye’s (+10.2%) and the popularity of its chicken sandwich, partially offset by KFC (-1.0%) and Pollo Tropical (-3.8%). Domino’s (+2.4%) delivered another strong quarter in Q3; however, this represents a sixth consecutive quarter of slowed growth. The Mexican (+2.5%) and coffee/snack (+2.4%) segments also posted modest growth led by Taco Bell (+4.0%) and Starbucks (+6.0%), respectively.

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