Traffic across the U.S. quick-service restaurant industry weakened modestly in July, according to Jefferies’ analysis of Placer data, with softer demand at chicken and pizza chains offsetting some of the improvement seen during June.
July gives back part of June’s traffic recovery
Jefferies Restaurants analyst Andy Barish reported that industry same-store sales increased 1.7% during July, approximately 10 basis points below the previous month’s performance.
The moderation reflected a roughly 20-basis-point deterioration in customer traffic, while average check strengthened by around 10 basis points.
Traffic declined approximately 2.1% for the entire month, compared with a roughly 1.8% decline through the first half of July, indicating that conditions weakened as the month progressed.
Potential disruption from Canadian wildfire smoke may have affected restaurant visits, according to Jefferies. Concerns surrounding Cyclospora-related foodborne illness could also have influenced customer behaviour towards the end of the month.
Higher checks support QSR sales
Quick-service restaurants continued to generate positive same-store sales despite softer customer visits.
QSR same-store sales remained at 1.8% compared with June, as an approximately 30-basis-point deterioration in traffic was counterbalanced by stronger average check.
Meanwhile, the two-year average trend improved by roughly 40 basis points month over month.
The combination suggests that pricing and customer spending helped protect restaurant sales even as traffic trends became less favourable.
Large restaurant chains see softer visits
Jefferies’ review of Placer data covering approximately 50 larger U.S. restaurant banners showed a clearer sequential slowdown.
Overall QSR traffic deteriorated by around 61 basis points compared with June.
The decline followed an approximately 145-basis-point improvement in the previous month, meaning July surrendered a meaningful portion of June’s recovery.
The figures nevertheless showed considerable differences between individual restaurant categories.
Burgers improve as chicken and pizza retreat
Burger restaurants performed comparatively well, with traffic trends improving by approximately 46 basis points sequentially.
Chicken chains weakened by around 60 basis points, reversing part of their earlier momentum.
Pizza restaurants experienced the largest deterioration among the categories highlighted by Jefferies, with traffic falling approximately 79 basis points compared with June.
These trends suggest that July’s weaker QSR performance was driven disproportionately by chicken and pizza rather than uniform weakness across fast-food restaurants.
Different datasets send contrasting signals
Jefferies also pointed to commentary from Lamb Weston that presented a somewhat different picture of restaurant demand.
In its fourth-quarter results, Lamb Weston described overall U.S. restaurant traffic as roughly flat, with QSR traffic also approximately unchanged.
Its category-level observations showed QSR chicken traffic increasing around 3%, while burger traffic declined approximately 4%.
The contrast with Jefferies’ Placer analysis may reflect differences in datasets, measurement periods or restaurant coverage, underscoring the importance of monitoring multiple indicators when assessing consumer behaviour.
QSR demand remains under scrutiny
July’s figures suggest that momentum across the U.S. fast-food industry moderated after June’s improvement, but the broader picture remains mixed rather than uniformly weak.
Same-store sales stayed positive, supported by higher average checks, while burger traffic showed sequential improvement even as chicken and pizza weakened.
The key question for restaurant companies is whether the July slowdown proves temporary or develops into a more sustained decline in visits. Consumer spending patterns, pricing and traffic trends will therefore remain important indicators for the sector as the second half of the year progresses.
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