This Bit of Good News Doesn't Mean the "Restaurant Recession" Is Over

For nearly two years now, the restaurant industry has been posting declining quarterly comparable sales. The so-called "restaurant recession" can be primarily chalked up to over-expansion as growth in dining out hasn't kept up with new restaurant openings. Some much-needed good news was released in October, though, that could indicate a recovery is underway.

According to industry research group TDn2K, average comparable sales at restaurants have been negative every quarter since early 2016. The metric, which accounts for both foot traffic and ticket size, has been hit hard as the notoriously competitive industry quickly expanded to keep up with increasing demand for places to eat out.

In recent years, the rate of new openings has far outpaced demand growth. While diner ticket size and menu prices have continued to go up, foot traffic declines have more than offset those as the restaurant count has started to poach customers and thin out dining rooms.

Source: Fool.com