LEESBURG, Va. – Sales at table-service restaurants and bars in the US started off favorably in 2012, but then weakened throughout the course of the year, according to GuestMetrics LLC.
"Comparing 2012 against 2011, the quarterly growth progression was 2.7 percent for 1Q12, 1.4 percent for 2Q12, 0.5 percent for 3Q12, and then a decline of 0.5 percent by 4Q12," said Bill Pecoriello , GuestMetrics CEO. "This means sales were up 1.1 percent compared to 2011. Digging deeper we see that food sales were up 0.7 percent while alcohol beverage sales were up 1.9 percent.”
Food sales benefited from 1 percent implied pricing, but the number of food items ordered was actually down 0.3 percent, he added. “Given food represents 53 percent of all items sold in table service restaurants and 64 percent of all dollar sales, the decline in number of food items ordered obviously has a large impact on restaurant operators,” he said.
To get a better understanding of what drove the decline in the number of food items ordered during 2012, the company analyzed the specific types of food being sold. The main culprit of the decline was entrées and desserts, which account for 52 percent and 6 percent of all food items sold, respectively. In 2012, entrées declined by 1.5 percent and desserts by 2.3 percent.
“On the flipside, our data indicates that sales of appetizers and sides, which account for 29 percent of food items sold, increased 2.8 percent in 2012," said Peter Reidhead , vice president of strategy and insights at GuestMetrics. “Our partner company, Consumer Edge Insight, found that among consumers spending less at restaurants, skipping food courses was among the top five ways to economize. Based on data from GuestMetrics' POS database, given the large difference in average price for an entree [$11.56] and that of the average appetizer and side [$5.57], a shift from entrées to appetizers and sides would have a negative impact on price/mix and therefore on the topline of restaurant operators.”
"Given the slow growth environment and shifts in consumer behavior, it's more critical than ever that restaurant operators align their menu offerings with the latest consumer trends. Looking specifically at what drove the increase in sales in appetizers and sides, the company saw that the largest growers were chicken wings, oysters, ribs and empanadas, said Brian Barrett , president of GuestMetrics. "But in terms of the decline in entrées, the largest entrée categories of steak, burgers and pizza actually held up fine. The decline was driven almost entirely by the long 'tail' of over 5,000 less prevalent entrées that we track in our database, suggesting there may be an underlying shift taking place in consumer preference to more mainstream entrées.”