According to GuestMetrics, restaurant/bar trends during the 4 weeks ending 10/06/13 showed further deterioration, resulting in 3Q13 being the weakest quarter so far this year for on-premise.
The data indicates that across the board during the 4-week period ending October 6th, trends for full service restaurants and bars continued to be very weak. Overall traffic to full service restaurants and bars started out the year at -1.4 percent in 1Q13, improved slightly to -0.8 percent in 2Q13, but then deteriorated to -1.7 percent for 3Q13, with traffic for the most recent 4-week period even softer at -2.5 percent.
All three segments within on-premise have been generally very weak. Traffic to bars and clubs was -3.5 percent in 1Q13, improved slightly to -1.5 percent during 2Q13, but deteriorated fairly sharply to -4.2 percent for 3Q13, with traffic down a concerning -6.0 percent during the most recent 4 weeks. Traffic to fine dining started out the year at +2.4 percent, softened to +1.4 percent during 2Q13, and ended 3Q13 at +0.2 percent, with traffic even slower at -0.9 percent during the most recent 4-week period. Casual dining traffic started out the year at -2.2 percent, improved to -1.4 percent during 2Q13, and was at -2.0 percent in 3Q13, with traffic at –2.5 percent during the most recent 4 weeks.
These trends are certainly discouraging, and likely a sign of the broad consumer base that continues to be very careful with their discretionary dollars particularly in light of the significant uncertainty coming out of Washington. Additionally, given the particularly weak trends during the last 4 weeks, which includes most of the first week of October, 4Q13 is likely already off to a soft start unfortunately.
On-premise alcohol volumes were -2.8 percent during 1Q13, recovered somewhat to -1.4 percent in 2Q13, but then decelerated to -3.8 percent in 3Q13, with alcohol volumes down 4.1 percent during the most recent 4 weeks. In terms of the specific alcohol categories, beer volumes were -4.3 percent in 1Q13, improved to -2.0 percent in 2Q13, but then deteriorated relatively sharply to -4.8 percent in 3Q13, with volumes at -5.2 percent during the most recent 4-weeks, likely hurt by the particularly weak traffic trends we’re seeing to bars and clubs. Spirits volumes were -2.4 percent in 1Q13, saw a slight improvement to -1.4 percent in 2Q13, and weakened to -3.1 percent in 3Q13, with volumes at -3.5 percent during the most recent 4-week period. And lastly, wine volumes started off the year on a positive note at +0.8 percent in 1Q13, improved very slightly to +1.0 percent during 2Q13, and have now dipped into negative y/y territory at -1.1 percent, with volumes at -2.0 percent in the most recent 4 weeks.
The early analysis of trends by region suggests that some of the particular weakness seen in on-premise during the past few weeks is likely due to the uncertainty relating to the government shutdown, so the hope is that with the recent resolution, some of the traffic and volume trends in on-premise will finally start to turn a corner in the coming weeks.