Consumers Reluctant to Spend, Data Shows


Same-store sales increased 1 percent in September while traffic decreased by 2.5 percent, according to new data.

Black Box Intelligence and People Report released their September 2011 restaurant industry snapshot last week, showcasing an increase in food and alcohol sales in September, but also indicating consumers’ lowest-yet willingness to spend.

Consumer Edge Research has been tabulating the willingness to spend index since December 2009. Its ups and downs reflect the public’s faith in the economy; the highest point on the index was in October 2010 and it has been in decline since April.

“We had started to recover, feeling pretty good about what was going on, but now with the unemployment situation and all the discourse in Washington, D.C., there’s this fear about a double dip in the recession,” says Wallace Doolin, chairman and founder of Black Box Intelligence. “I think people are increasingly concerned.”

The 2.5 percent drop in traffic is a big problem, Doolin says. “If you look at the disparity between the top-performing companies and the bottom-performing companies, it's pretty dramatic. In September, traffic in the bottom quartile was very badly hit.”

The Southwest was most affected by negative profits, tracking a loss of 1.7 percent in sales and 5.4 percent in traffic. New York/New Jersey, meanwhile, was the strongest region, with a 3.96 percent increase in sales and a 1.91 percent increase in traffic.

“The Southwest in quarter one was really pretty strong,” Doolin explains. “Intuitively, I think this huge drought we’ve had has probably had a big impact on it as well. People are just not dining out as much.”

Despite the concern, food and alcohol sales were up in September and have increased throughout the third quarter.

Meanwhile, a loss in foot traffic to restaurants has not stopped job growth. Jobs in the restaurant industry have grown by 1.5 percent in the past three months.

“Our industry is an entrepreneurial industry, and it has farily low barriers to entry, so there’s always going to be new people on the scene getting into the business,” Doolin says. “I also believe that strong competitors are doing really well, even in this down economy.”

By Sonya Chudgar

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.

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