Industry analysts in the retail and food and beverage industries in the U.S. remain cautiously optimistic ahead of the holidays, as foot traffic at retail centers rallies and results for dining remain mixed. According to a new report from Black Box Intelligence, restaurant performance remains varied, driven by shifting consumer preferences and persistent challenges to consumer confidence following the pandemic.

Placer.ai found that retail foot traffic showed resilience in October, particularly in open-air shopping centers and outlet malls, while restaurant industry data from Black Box Intelligence paints a more complicated picture. Quick-service and fast-casual chains have benefitted from a sustained focus on value and convenience, showing positive sales growth in October compared to the same period last year. However, full-service restaurants are struggling to maintain momentum, particularly in areas recovering from natural disasters, such as the Southeast.

A report from CNBC found that restaurant bankruptcy filings have grown by at least 50% so far this year. The report also highlighted that no major restaurant company has gone public since Cava’s IPO in June 2023, reflecting market sentiment surrounding the sector. In addition, companies like Starbucks and McDonald’s have experienced a challenging year and recent quarters.

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On the flip side, a recent report about the quick-service sector from Placer.ai found that limited-time promotions have been effective in sustaining traffic. Franchises, including Burger King and Taco Bell, leveraged promotions to post quarterly foot traffic gains over 2023.

Restaurant traffic is expected to see modest improvements in 2025, according to Black Box Intelligence, with sales forecasted to remain flat or slightly positive. However, industry performance will largely align with pre-pandemic trends, with annual losses in same-store traffic expected to range from -3.4% to -2.4%, marking a slight recovery from 2024 levels. The firm noted that worst-case scenario performance would be consistent with this year's results.

On the retail side, malls appear to be rebounding. According to Placer.ai, October visits to open-air shopping centers were up slightly year-over-year, while outlet malls led gains with a 6.5% surge in mid-October. This momentum could drive stronger performance for restaurants located in or near these shopping hubs as holiday foot traffic ramps up.

But labor shortages in the restaurant sector remain a key challenge, Black Box Intelligence found, with turnover rates staying elevated and staffing gaps making it harder for operators to capitalize on increased demand during the holiday season.

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