Restaurant Industry Performance Pulse: June 1, 2022

Sales Growth Softens To Lowest Level Since Late March

Powered by Black Box Financial Intelligence™

Data through the week ending May 22, 2022

• Restaurant sales growth fell during the week, with the industry seeing its worst results since week ending March 20. However, despite the slowdown, there is some good news in the fact that the industry continues to hold on to positive sales growth year over year. The last time the industry experienced declining sales was the week ending March 7, 2021, when restaurants lapped over the pre-pandemic period for the last time on a year over year basis.  
• Although traffic continues to decline, restaurants continue to enjoy positive sales growth due to persistent growth in average guest checks. Sales and traffic growth rates fell during the week, while traffic deteriorated at twice the rate of the decline in sales. Restaurant traffic growth has declined for the last 11 consecutive weeks. 
• To keep track of sales and traffic week to week and understand how you are performing compared to the market, subscribe to Financial Intelligence. Subscribers will know the results of the previous calendar week each Friday. Click here for more information. 
• The best performing segments based on sales growth during the week were fine dining, upscale casual and family dining. The segment with softest sales growth was quick service, followed by casual dining. 
• For both full and limited service, the share of off-premise sales as a percentage of the total continues to be elevated relative to the pre-pandemic norm 
• However, the rate at which off-premise sales are growing year over year has slowed down considerably and is now negative for both. The decline in off-premise growth is greater in full-service restaurants than for those in limited-service. 
• Only five states experienced negative sales growth during the week: Illinois, Mississippi, Nevada, New York and Alaska. The best performing regions based on sales growth were New England, the Mid-Atlantic, California and Southwest. The regions with weakest sales growth were New York-New Jersey, Texas, the Western region and Southeast. The only region with negative sales growth during the week was New York-New Jersey. 

Full-Service Hourly Wages Continue Run of Historically-High Increases 

Powered by Black Box Financial Intelligence™

• In response to the staffing shortages faced by the industry since Spring of last year, full-service restaurants have been raising hourly wages at an accelerated pace to attract talent. Year-over-year hourly wage increases have been greater than the industry has experienced in decades.   
• Double-digit year over year growth in hourly wages was common during the months of the first quarter of the year for line cooks, a representative position for wages among full-service restaurant companies. However, as high as wage growth has been in full-service, wages have been growing at a substantially higher pace for hourly crew members in limited-service brands. 
• There are very significant differences in full-service wage growth at the regional and state level, with year over year growth fluctuating by over 10 percentage points between the states with the highest and lowest growth rates. 
• The states with highest wage growth for full-service line cooks during March were North Carolina, Kentucky, Rhode Island, Vermont, Nebraska, South Dakota and Florida. 
• The states that experienced the lowest wage growth for full-service line cooks were Wyoming, Louisiana, Washington, Mississippi, Maryland, New York and Texas. The District of Columbia would also be classified as among those with the smallest year-over-year wage growth for full-service employees as of March 2022.