Restaurant Sales Start to Rebound

March retail sales certainly rebounded, and it looks like restaurants are enjoying some improving sales figures as well. According to data from the NPD Group restaurant sales were up 1% in March after declining 2.9% in 2009.

The industry is also adding jobs, with 42,500 new ones coming on board during the first three months of this year. Those figures are down, though, by 251,000 since December 2007.

At Yum! Brands, first quarter earnings rose 11%, helped in part by its Pizza Hut chain, which had a same-store sales rise 5% because of a promotion that offers any pizza for $10. But US sales were still down at the Taco Bell and KFC chains.

And Frisch’s, the owner of the Big Boy and Golden Corral chains in the Midwest, certainly didn’t see any kind of uptick in its most recent quarter, when fell nearly 41% and sales were down 4.2%.

Do you see more people dining out, or will the unemployment picture need to turn around further before there is significant improvement?

ALSO: Retail Sales Are Up, but Landlords Are Still Feeling Down

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6 Responses to “Restaurant Sales Start to Rebound”


  1. 1 Bob Greenfest April 15, 2010 at 7:48 am

    Ian – I’m not sure the increase in restaurant sales accurately reflects a true positive trend. First, March 2009 was near the nadir in the economy. If March 2010 sales were not reflective of an increase from the lowest point in time, we, as a nation, would be in a true depression, rather than the recession we’re presently experiencing. Furthermore, I believe the fact that residential mortgage delinquencies are continually increasing is reflective in the increase in restaurants sales. Even if non-mortgage paying individuals were taking half of the money they would otherwise use to pay their mortgage, and using funds to eat out and spend on consumer goods, a “sales rebound” would be recorded. Time will tell whether this is all smoke and mirrors. For additional insights, see http://www.bobgreenfest.wordpress.com.

  2. 2 Doug April 15, 2010 at 9:02 am

    Ian: Here is a small overlooked fact. The Restaurant industry employs more Americans than any other industry. They were the first to feel the recession, and I have a feeling they will be the last to see the uptick. The answer when it comes to a rebound in dining out is, it depends on the brand and where. Small independents, fast food, and cheaper alternatives are doing well, near lux restaurants are suffereing like Houston’s, Cheesecake, and Kincaid’s. Express concepts work well in this economy, but full service sit down Captial Grill types are facing serious issues.

  3. 3 Tahitijack April 15, 2010 at 10:45 am

    I still do not see “the turn” the media is talking about. In my world my local restaurants are still quiet and on any given Friday or Saturday evening reservations are not necessary at the upscale eating establishments. I spoke with the onwer of one of the better places to dine in my hometown last Friday. He captured it as “dinner out is a luxury, my customers that use to drop in once a week now come once a month…even though I have reducted prices and offer $10 meals and half price drinks every eventing until 7 pm….” We are far from over this nightmare. Small business owners are not going to hire when they are facing tax increases, uncertain healthcare costs, and possible incresed government intrusion/regulation into how they run their business. Small business drive the economy.

  4. 4 Judith Brower April 15, 2010 at 11:29 am

    In our area, which is relatively upscale, three higher-end restaurants we represent are reporting a marked increase in sales in the past 30 to 60 days. These restaurants have increased their tapas menues and lunch specials during the recession.

    In addition, a long time Greek, high-priced restaurant has gone out and been replaced by a restaurant featuring lots of beer and $12 entrees, with good food and a known higher-end proprietor. In its first month, it has an hour wait for tables, and by the time tourist season starts, the locals anticipate having to abandon it as it will be slammed. It is a fun, joyous and inexpensive option.

    My note is that landlords seeking to replace empty spaces may be wise to look for solid restaurant owners seeking to try out new, lower price-point concepts.

  5. 5 Anthony Homer April 16, 2010 at 10:10 am

    Ian, I agree with Judith. I represent a mixed use lifestyle center and our restaurants are having to adjust to the new “value-economy” just like everyone else. Our area in Sarasota, FL is a seasonal market with tourism and snowbirds a big part of the dining market. Sales were down 33% across the board last year and we saw many closures in the less-than-ideal locations. Meaning anyone who wasn’t in a high traffic, or have an established business suffered much more than the grade-A spots with good marketing.

    Having said that, we’ve signed three new restaurant leases in the last 60 days and for good operators, now is a great time to climb the food chain and locate in better locations for the same dollar amount.

  6. 6 Felix D F April 16, 2010 at 12:55 pm

    As federal income taxes, health care tax, additional social security / medicaid tax (not yet announced)as well as tax write offs that will no longer be allowed are implemented the amount of discretionary income available will be reduced or for many, be entirely eliminated. So any recovery over the next couple years by most businesses that are dependent upon discretionary spending will turn out to be short lived. Normally an increase in cost to a family could be overcome in good economic times by a corresponding increase in income. However it appears that any increase in income will come as a result of the amount of increase in productivity that is in excess of the increase in cost of doing business. So I guess it comes down to how hard are people going to be willing to work to be able to afford to go out to dinner?


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