Still-cautious clientele keep casual-dining sector in slump

Nation's Restaurant News,  Nov 12, 2007  by Malcolm M. Knapp

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As of September, 1.28 million persons had been unemployed for 27 weeks or more, 17.6 percent of the unemployment total. In September 2006 the percentage was 18.1 percent.

This persistence in long-term unemployment remains a negative pressure on consumer confidence.

Employment in the service-providing sector--which includes retailing, services and government--increased by 143,000 jobs. The service sector was up 1.93 million jobs, or 1.69 percent, for the prior 12 months.

Foodservice and drinking place employment rose by 25,400 jobs in September. Over the preceding 12 months, foodservice and drinking place employment increased by 355,100 jobs, or 3.76 percent.

Seasonally adjusted hourly earnings were up 7 cents in September to $17.57, a rise of 4.09 percent from September 2006. Seasonally adjusted average weekly earnings were up $2.37 in September 2007 to $593.87, also a 4.09-percent year-over-year increase for the month.

In August, 10 of 11 KnappTrack regions showed positive same-store sales gains among the casual-dining sector. One region, California, had negative comparable-restaurant sales results. Ten regions had better comparable sales results in August 2007 than in July 2007. One region, New England, had worse results in August than in July.

The spread between the high and low regions for comparable-restaurant sales in August was 5.2 percentage points, versus the 6.0 points of July 2007.

The best performing region was Texas, followed by Pacific Northwest, Middle Atlantic, West North Central, East North Central and East and part of West South Central. Those six regions had better or equal comparable-restaurant sales results than the national average of 1.7 percent in August. The worst performing region was California, followed by Florida, New England, Mountain and South Atlantic.

Year-to-date through August, the highest region for comparable sales was the Pacific Northwest and the lowest was Florida. The spread between the two year-to-date regions was 4.1 percentage points. The median-concept same-store sales change was 1.7 percent. Olive Garden had the highest comparable sales result in August for concepts with over $300 million in sales.

With regard to comparable restaurants in August, the spread between same-store sales and guest counts was a negative 3.2 percentage points. The national average for same-store guest counts in August was a negative 1.5 percent. The best performing region was Texas. The worst-performing region was California. Two of 11 regions had positive guest counts. Nine of 11 regions had negative guest counts. The spread between the best- and worst-performing region was a negative 5.5 percentage points.

Casual dining's all-restaurant sales in August were up 7.2 percent. By that yardstick, all 11 regions were positive. One region had a double-digit increase. The spread between all-restaurant and comparable-restaurant sales was a negative 5.5 percentage points.

All-restaurant guest counts in August were up 3.8 percent. All regions were positive. The spread between all-restaurant and same-store guest count gains was 5.3 percentage points.