Early fourth-quarter sales reports suggest unemployment and anemic consumer spending have continued to hamper sales growth for restaurant chains.
With two investor conferences on the calendar last week, a number of restaurant companies released preliminary sales reports for the final quarter of 2009. Although many reported gains in total revenue from new restaurant openings, declines in same-store sales continued to stain companies’ results.
Analysts had largely hoped to see some same-store sales gains in the last quarter of the year because of easy comparisons to the end of 2008, when consumers were still reeling from the financial crisis and the deepening of the recession, leading to some dramatic sales declines.
That optimism has faded a bit given the still negative nature of year-over-year sales declines seen in many of last week’s preliminary reports.
"The restaurant industry is entering 2010 with no clear signs of sales recovery, in effect relinquishing its historical fundamental role as an early recovery group,"said a group of Bank of America Merrill Lynch consumer analysts in a note to clients Jan. 8.
Even fast-food chains – the lone stalwarts of sales growth in much of the past two years – reported drops in same-store sales. CKE Restaurants Inc., for example, reported a 6.5 percent drop in its December same-store sales. Sonic Corp. reported an identical drop in same-store sales for its fiscal first quarter, which ended in November.
