1Q24 Restaurant Overview & Same Store Sales

May 22, 2024 | Insights, Restaurant Research

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1Q24 Restaurant Overview

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From a financial performance perspective, 1Q24 was not bad for the restaurant sector. Even though industry traffic continues a post-covid trend of steady declines, strong margins reflect that the chains have been more than successful in passing along hefty price increases to cover significant inflationary pressures of the past. Granted, it appears to be a short-lived season of margin harvesting now that many chains realize that they must share their cost deflation savings with their lower-income customers or risk losing this market segment to the grocery stores. In any case, those chains that are offering the best perceived value to their respective demos are putting-up some pretty good numbers.

1Q24 QSR Summary

1Q24 FSR Summary

1Q24 Same Store Sales

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A steady trend of declining quarterly same-store-sales comps reflect: 1) the impact of material menu price increases needed to compensate for significant input cost inflation over the past several years; and 2) consumer spending weakness which is most evident with the lower income demo.

Notably, 1Q24 comp weakness was widely attributed to very poor results during January which is thought to be a function of bad weather. However, we have a different take on January’s results, which certainly dragged down the quarter’s results, as discussed here. In our opinion, 1Q24 represents a clarion call to the chains that consumers are finally done with “celebratory spending” as they finally return to their post-covid ways. For industry sales to recover, operators must get busy returning some of their deflationary savings back to their customers.

1Q24 QSR SSS Chart

1Q24 FSR SSS Chart

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