Jefferies says QSR traffic softened in July on weaker chicken, pizza

Investing.com -- Quick service restaurant traffic softened slightly in July, according to Placer data from Jefferies, as the sector gave back part of June's improvement due to weaker chicken and pizza performance.

Industry same-store sales reached 1.7% in July, about 10 basis points below June, as traffic slipped roughly 20 basis points while check firmed around 10 basis points, according to Jefferies Restaurants analyst Andy Barish. Traffic for the full month declined approximately 2.1% compared to down roughly 1.8% through the first half of the month.

The firm attributed the traffic moderation to possible weather disruptions from Canadian wildfire smoke and foodborne illness concerns related to Cyclospora late in the period.

Within the QSR category, same-store sales held flat month-over-month at 1.8%, with a roughly 30-basis-point traffic decline offset by check. The two-year average trend improved around 40 basis points month-over-month.

In Jefferies' analysis of approximately 50 larger U.S. restaurant banners, Placer trends suggest July QSR traffic softened sequentially versus June, with overall QSR down roughly 61 basis points. This gave back part of the prior month's approximately 145-basis-point improvement.

Within QSR segments, burger traffic firmed modestly by 46 basis points, while chicken gave back around 60 basis points and pizza declined roughly 79 basis points.

The firm noted that Lamb Weston characterized U.S. restaurant traffic as roughly flat in its fourth quarter results, with QSR traffic also flat, QSR chicken up approximately 3%, and QSR burger down roughly 4%.

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