On-premise Trends Performed Best Since August
GuestMetrics’ data indicates trends for full service restaurants and bars showed some signs of improvement during the 4 weeks ending November 3rd. Overall traffic to full service restaurants and bars was -1.9 percent in 3Q13 vs. prior year, but improved to -1.3 percent during the most recent four weeks. While certainly not a picture of resounding strength, this is the best y/y figure for overall traffic since August.
Traffic to bars/clubs was -4.2 percent in 3Q13 and deteriorated even further to -4.6 percent during the most recent 4 weeks (though it should be noted this is better than the concerning -6.0 percent seen during the 4 weeks ending 10/6/13). Casual dining traffic was -2.0 percent during 3Q but then improved to -1.2 percent during the 4 weeks through early November. Lastly, traffic to fine dining was -0.7 percent during 3Q and remained generally consistent with that level at -0.6 percent during the most recent four weeks. So while bars/clubs weakened relative to 3Q and fine dining showed only a minimal improvement, the improvement in overall on-premise traffic trends was driven almost exclusively by casual dining (which represents nearly 70 percent of overall on-premise).
On-premise alcohol volumes were -3.7 percent during 3Q13 but improved to -2.9 percent during the most recent 4 weeks. In terms of the specific alcohol categories, beer volumes were -4.8 percent in 3Q13 but improved slightly to -4.0 percent during the most recent 4 weeks. Spirits volumes were -3.1 percent in 3Q13 but improved to -2.4 percent during the most recent 4 weeks. And lastly, wine volumes were -1.3 percent during 3Q13 but improved to -0.4 percent during the most recent 4 weeks, so after starting the year off on a strong note but then weakening over the past few months, wine volumes almost broke back into positive y/y territory.
Given 3Q showed the weakest trends of the year in on-premise, the slight improvement seen during the most recent 4 weeks is certainly a positive. However, key will be to see whether this is the beginning of a more sustained improvement in the coming months, or whether the improvement is just a temporary uptick from pent-up demand from the government shutdown. GuestMetric’s sister company, Consumer Edge Research, published its interim CEI index last week which showed that there wasn’t much of a bounce in consumer confidence thus far in November despite an end to the government shutdown.