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Restaurant sales in a 'deep freeze,' Mother's Day to the rescue?

May 06, 2013|By Tiffany Hsu
  • Restaurants had a tough first quarter due to bad weather, but Mother's Day may come to the rescue.
Restaurants had a tough first quarter due to bad weather, but Mother's… (Nancy Stone / MCT )

American restaurants are expected to report dismal same-store sales for the first quarter, slammed by cold weather and cost-conscious consumers, but the industry hopes that Mom will come to the rescue.

A forecast from Thomson Reuters shows eatery sales in a “deep freeze,” advancing a “sluggish” 1% after surging 6.3% during the same quarter in 2012.

Bitter temperatures, especially in the Northeast, kept traffic minimal, according to the report. But even when diners ventured out, “they didn’t want to spend much,” according to the report.

Payroll tax hikes this year and ongoing food cost inflation forced many restaurants to raise menu prices. Same-store sales growth in the industry has shrunk steadily over the past four quarters and likely “will continue to decelerate,” according to Thomson Reuters.

Quick-service establishments saw a 1.6% boost over the first quarter, down from the 7.5% upswing a year earlier, according to the estimates. Starbucks, with a 6% increase, had the strongest comparisons in the group, but still missed its 8% mark from the first quarter of 2012.

Burger King, shouldering bad weather, heavy competition and what Thomson Reuters called an “uneven marketing strategy,” endured a 1.4% slide in same-store sales.

The casual-dining sector fared even worse, dipping 0.6% after rising 2.7% a year earlier. Darden was the weakest performer, dragged down by the 6.6% dive in sales from its Red Lobster brand.

The seafood chain, according to Thomson Reuters, is “struggling to grow sales given consumer reluctance to spend, perceptions about quality and a changing menu and pricing.”

But the industry is looking to this weekend to provide a boost. Mother’s Day is the most popular holiday for dining out, according to the National Restaurant Assn.

More than a quarter of American adults will mark the occasion by eating at a restaurant, according to the trade group. And 7% will rely on takeout or delivered meals.

That’s 80 million people patronizing eateries, the group said. The majority will treat Mom during dinner, while a third will celebrate at lunch and 30% at brunch.

Nearly a quarter plan more than one restaurant meal.

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