How Did Your Restaurant Fare Through Q2?

Produced by BDO’s Restaurants practice

The restaurant industry saw an overall 0.2 percent dip though Q2, evidenced by BDO’s latest edition of The Counter. While oversaturation and industry competition contributed to the dip, evolving revenue streams like technology and third-party delivery services helped buoy some brands.

Pizza, QSR and Upscale Stay Positive

Pizza had the highest same-store sales, ending Q2 with a 3.5 percent bump. For the eleventh consecutive quarter, Domino’s led the pack with a 12.6 percent increase owed to advancements in technology and a focus on successful franchisees.

Quick serve and upscale casual also had good quarters, posting positive same-store sales of 0.3 percent and 0.2 percent respectively. New menu items led to the increases here, with Taco Bell, KFC and J. Alexander’s leading their respective segments.

On the flip side, fast casual endured a 1.7 percent loss through Q2. Chipotle came out on top for the second consecutive quarter with a 12.5 percent increase. Though Chipotle’s numbers look better, the brand is still recovering from the 2016 foodborne illness crisis.

Restaurateurs Refocus Menus 

While cost of sales were up across the board, except for fast casual, some commodities saw increases as well. Notably, the uptick in the prices of vegetables at 6.2 percent and poultry at 1.6 percent were felt across the industry. As companies grapple with cost increases, many restaurants are re-engineering their menus to refocus discounts and promotions on more cost-effective menu items.

 Looking Ahead

As legislative priorities shift, restaurateurs should be ready to pivot on a moment’s notice. Moving forward, it will be important for restaurants to stay apprised of shifting attitudes, both in terms of legislative action and on a consumer level, to be able to adapt business models accordingly.

To benchmark your organization or learn more about restaurant industry performance—including segment leaders and labor costs—view The Counter in full here.