4Q23 Chain Restaurant Same Store Sales Results

Apr 3, 2024 | Insights, Restaurant Research

The chain restaurants reported solid 4Q23 same store sales comp results which were mostly in-line with the last several quarters. While traffic continues to represent an industry challenge, the chains have been successful in passing through menu price increases while also driving a favorable product mix. Industry players have been mostly successful in offsetting sales weakness from the lower income demo with sales growth from the more affluent. Fortunately, the possibility of interest rate cuts later this year could help spur a rebound in lower income demo spending, providing a boost to the industry, but especially to those chains most oriented towards the less affluent. 

QSR & FSR SSS Charts

Commentary

  • It is notable that 4Q’s healthy comp growth was achieved during a period of slowing menu price increases enabled both by lower food cost & labor inflation.
  • It is further notable that the percentage of chains generating positive comps surged to 87% during 4Q, up from 76% during 3Q.
  • The performance of top brands during 4Q was particularly strong, with Wingstop up +21%, Texas Roadhouse up +10%, and both Chipotle & Krispy Kreme up +8%. This reveals that squeezed consumers are increasingly drawn to affordable treats at their favorite trusted chains.
  • While the sub-segments most oriented towards the lower income demo (family & pizza) continued to be pressured during 4Q, the possibility of 2H24 rate cuts could provide substantial help to these players.
  • As a point of clarification, accounting practices permit retail companies to report y/y growth over either a comparable 52/12 week or a 53/13 week period during every sixth year when the calendar is cheated by the lack of a prime-time retail weekend. Some companies choose to report with the extra week to help their sales results while others do not take this accommodation. Hopefully, this practice will eventually be phased-out as it adds needless confusion in our opinion.

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