Quick-Service Restaurants See Slight Traffic Dip, Price Increases in Q2
Publicly traded restaurant companies are beginning too release their second-quarter financial results, and early data from RMS indicates a mixed performance in the quick-service sector.Traffic experienced a modest year-over-year decline of 0.9%, while average prices saw a 1.3% increase. This led to a 1.3% rise in net sales, with the average check growing by 2%.
Breakfast Woes continue, Late Night Emerges as Growth Area
The divergence in daypart performance remains a important trend. Breakfast traffic in Q2 dropped by 8.7% compared to the previous year, following a similar decline of -9.5% in the first quarter. This sustained downturn suggests that factors beyond inclement weather are impacting morning business, with consumers increasingly opting to eat breakfast at home rather than on the go.
In contrast, the late-night daypart is showing signs of a strong comeback, with some restaurant brands successfully offsetting losses from other periods. This shift is prompting more operators to explore late-night dining as a growth chance. Strategies include extending operating hours and focusing on profitable, easily assembled meals and bundles.
Data from RMS reveals that 34% of consumers are dining out more frequently during late-night hours, and 70% are utilizing delivery services during off-peak times. This indicates a growing consumer preference for late-night options and a willingness to engage with restaurants through delivery during these times.
Context for the Quick-Service Industry:
The quick-service restaurant (QSR) sector, often characterized by its speed and affordability, plays a crucial role in the broader food service industry. Trends within QSR can often signal shifts in consumer spending habits and economic conditions. The observed decline in breakfast traffic, for instance, could be attributed to a variety of factors including changing work-from-home policies, increased grocery store availability of breakfast items, or a general re-evaluation of morning routines by consumers.Conversely, the growth in late-night dining suggests an evolving consumer lifestyle and a demand for convenient food options outside conventional meal times. This trend might potentially be driven by factors such as later work schedules,increased entertainment options,or a desire for late-night snacks and meals. The success of brands in this daypart highlights the importance of adaptability and strategic menu planning in response to changing consumer behaviors. The overall performance of the QSR sector,as reflected in net sales and average check growth,provides insights into the industry’s resilience and its ability to navigate economic fluctuations through price adjustments and operational efficiencies.
