Atlanta restaurant gift certificate

Comparable-restaurant sales for the casual-dining sector rose by an estimated 4.1 percent in January, which compares with the 4.5-percent increase a year earlier for the comparable month.

Guest counts on a same-restaurant basis rose by 2.3 percent for the five weeks ended Jan. 30, compared with the traffic increase of 3 percent in January 2004.

The final accounting for January will depend in large part on shifts in results for individual concepts based on the specific weeks included in their accounting month. Monthly data for November 2004, December 2004, January 2005, February 2005 and March 2005 will not necessarily be comparable to the results reported in the prior year's months owing to shifts in holidays, including Christmas, New Year's Eve, Super Bowl Sunday and Valentine's Day. Even April will see a shift because of Easter. Use care when you make comparisons with prior-year monthly data.

Same-restaurant sales for casual-dining brands grew in four of the five weeks of fiscal January, and four of the five weeks saw positive comparable-restaurant guest counts.

The one negative week was the result of heavy snow in the East North Central region through New England during the week ending Jan. 23.

The spread between the best week of the five weeks in January 2005 versus the worst week was 9.3 percentage points, with the best week being the last week--even though an ice storm seriously impacted Atlanta and areas around it. The worst week was the one that included the big snowstorm.

The biggest driver of sales in the last week of December and through the month of January was the increase in the dollar volume of restaurant meal gift cards and certificates. National Restaurant Association research shows that restaurant meal gift cards and certificates are the No. 1 preferred category of gift certificates to be received in the gift card universe. At least one of the multi-billion-dollar, publicly owned casual-dining companies reported gift card and certificate dollar volumes 25 percent above those of the prior year. And at least 70 percent of the dollar value of gift cards and certificates was redeemed by the end of January.

The casual-dining sector's estimated comparable-restaurant sales growth of 4.1 percent in January was close to expectations, based on the strength of the economy, but was surpassed by the weighted-average growth in same-store retail sales of 3.5 percent, as measured by Bear Stearns' retail analysts.

The pattern of the period from April 2003 through December 2004 was that Bear Stearns' retail same-store results outperformed the casual-dining sector, with the exception of November 2004 and, now, January 2005. In January drugstores led comparable-store sales with a gain of 4.0 percent, followed by discounters, at 3.5 percent; home furnishings stores, 1.2 percent; and department stores, 0.9 percent.

Junior apparel led soft lines of merchandise with a comparable-sales gain of 13.2 percent, with footwear last, down 1.1 percent.

The more affluent customers are emotionally but not particularly fiscally affected by gasoline, food and prescription drug price increases. For example, the high-end Neiman Marcus stores were up 12.2 percent in January, while Target, a discount store with an income demographic higher than that of its competitors, had a comparable-store sales increase of 9.4 percent. In contrast, Wal-Mart--excluding its Sam's Clubs--was up only 3.2 percent.

Value propositions for the majority of concepts will continue to be very important as energy cost increases, food price increases, medical cost increases and inflation in general put substantial pressure on households earning under $50,000.

As of January, the basic economy was in decent shape, although the Index of Leading Indicators was down for two months in a row. The Manufacturing Index, as measured by the Institute for Supply Management, was 56.4 in January 2005, down 0.9 percentage points from December's index number of 57.3. That marked the sixth time the index was below 60.0 since October 2003.

The nine months between October 2003 and July 2004 were the longest consecutive series of months over 60.0 in more than 30 years.

The average manufacturing index for all of 2004 was 60.5. The last time the index was more than 60.0 was in 1973, when it averaged 65.9. An index above 50.0 indicates an expansion of manufacturing activity. The nonmanufacturing industries' index of the Institute for Supply Management fell 4.7 index points to 59.2 in January 2005, from 63.9 in December. Services have been expanding since March 2003.

The good news is that from January 2004 through January 2005 the number of payroll jobs increased by nearly 2.1 million. There is every reason to believe that jobs will continue to be added over the course of the remainder of the year. It is not unreasonable to expect at least 2 million net new jobs for all of 2005. That increase in jobs would help move the economy ahead despite the current emotional turbulence and high energy prices.

The final comparable-restaurant sales of December 2004 rose by 3.3 percent, versus year-earlier levels. That latest result was 3.4 percentage points better than the below-trend result for December 2003, which was the prior year's second-worst month by dint of a 0.1-percent decline in comparable-restaurant sales.

December 2004 saw comparable-restaurant guest counts rise by 1.3 percent. The comparable-restaurant guest counts of December 2003 were down 1.5 percent.

Comparable-restaurant sales on a year-over-year basis for the 12 months of 2004 were up 2.3 percent, versus the 12 months of 2003, for which comparable-restaurant sales grew only 1.3 percent. For all 12 months of last year, comparable-restaurant sales were 1.0 percentage point higher than for the prior year. All-restaurant sales on a year-over-year basis for last year's 12 months were up 8.5 percent, versus 7.6 percent for all of 2003.

The Consumer Confidence Index rose slightly in January 2005 by 0.7 index points, to 103.4. The January index number was 5.7 points above that of January 2004. The Present Situation Index rose by a quite strong 5.2 index points to 110.9 index points, which is 24.8 index points above January 2004.

The Present Situation Index now is now at its highest level since May 2002. The Expectations Index--how people think the economy will perform in July 2005--in a contrary move fell 2.3 index points to 98.4. That is only 6.9 index points below the January and July 2004 high of 105.3. Expectations in January 2004 were 19.2 index points above Present Situation. By January 2005, in a reverse, Present Situation exceeded Expectations by 12.5 index points.

Detailed January 2005 data show that Consumer Confidence was better in five regions and lower in four regions, compared with December 2004 levels. The strongest region for Consumer Confidence in January was West South Central at 124.3 index points, followed by Mountain at 115.8, South Atlantic at 115.4, East South Central at 113.3, Pacific at 102.1, West North Central at 101.1, New England at 94.2, Middle Atlantic at 87.2 and East North Central at 84.2. The largest regional increase in an index number was 16.5 for the West South Central region. The largest regional decrease, of 10.0 index points, was for the West North Central region.

The unemployment rate in January 2005 was 5.2 percent, down 0.2 percentage points from December 2004. That was the 49th straight month the unemployment rate had exceeded the tight range of 3.9 percent to 4.1 percent since the 15 consecutive months ending in December 2000. The unemployment rate was either 5.2 percent or 5.5 percent in each month since July 2004.

The total number of people working in nonfarm jobs in January was 132.6 million. There was an increase of 145,000 nonfarm jobs for the month, from December 2004. That was the 17th time since September 2003 that nonfarm employment had risen.

Nonfarm jobs increased by nearly 2.1 million from January 2004 to January 2005. The initial jobs increase of December was revised downward by 24,000 jobs to an increase of 133,000 jobs.

Total employment peaked in March 2001 at 132.5 million jobs. Total nonfarm employment fell by 70,000 jobs from March 2001 through December 2004.

By January 2005 there was an increase of 76,000 jobs from March 2001. In January 1.6 million persons had been unemployed for 27 weeks or more, 20.9 percent of the unemployment total. That persistence in long-term unemployment is a negative pressure on consumer confidence.