Restaurant Industry Performance Pulse

This is a weekly update by Black Box Intelligence™ providing workforce, guest, consumer and financial restaurant industry insights focused on the evolving impact of the coronavirus pandemic and other topics affecting the hospitality sector.

Restaurant Industry Performance Pulse

 

 

 

Key Insights – January 20, 2020

 

Workforce Trends


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  • Wage growth has varied for hourly employees. Limited-service* has almost no yearoveryear growth while line cooks in full-service** have seen strong wage growth.  
  • There is much more consistency between limited and full-service for restaurant general manger salaries. Base salary for general managers has increased at about the same pace year over year.  
  • There are significant discrepancies between limited and full-service when it comes to annual bonus for restaurant general managers. 
  • Management bonuses for limited-service restaurants have held up quite well as a result of the sector’s performance. On the contrary, full-service general managers are operating in an environment of big sale losses. Consequentlythese general managers are seeing considerable drops in their total take-home pay compared to what they received in 2019. 

*Limited-Service: quick service and fast casual 
** Full-Service: casual dining, family dining, upscale casual and fine dining  

 

Financial Trends

 

 

Powered by Black Box Financial Intelligence™
(based on data from the week ending January 10)

 

  • Comp sales and traffic improved for the second consecutive week, fueling optimism for recovery after a disappointing Q4.  

For more industry performance data visit the Restaurant Industry Snapshot: December Ends 2020 with Exasperating Sales Results; Final Week Offers Reasons for Optimism.

  • Comp sales and traffic for the week were the best for the industry since the pandemic began in mid-March 2020. 
  • Despite this significant upswing the last two weeks, comp sales (and especially comp traffic which is performing considerably worse than sales) are not yet able to post growth on a yearoveryear basis. 
  • New stimulus checks, increased prospect of expanded aid by the new administration and a mild weather for the beginning of the year all could translate into confidence for consumers.  
  • Except for fine dining, full-service* segments improved sales performance the most in the last two weeks.  
  • The last two weeks brought big jumps in dine-in sales for full-service restaurants. But despite these improvements, dine-in still has a long way to go before it returns to pre-pandemic levels. 
  • Off-premise*** sales in full-service have been growing rapidly over the last two weeks outpacing the improvements seen in dine-in. Yearoveryear off-premise sales growth has quickly reverted to levels not seen since the middle of 2020. 
  • Off-premise sales growth also accelerated for limited-service*** brands during the last two weeks, although at a slower rate than full-service.  
  • Three regions of the country posted positive sales growth during week: The Southeast, Mountain Plains and the Southwest.  
  • The worst performing regionwere California, New England and New York-New Jersey. 

 

***Off premise: restaurant to-go, delivery and drive-thru where applicable 

 

Guest Trends


Insights from Black Box Guest Intelligence™
  • As offpremise spending rose rapidly for full-service restaurantsan analysis on what menu items were mentioned revealed that ribs received the highest number of positive comments and positive net sentiment.  
  • Menu items with negative sentiment for full-service restaurants are desserts, fries, pizza and flatbreadsLimited-service brands, however, get strong positive reviews for burgers and fries.   
  • Despite typically being associated with off-premise consumption, the standout in negative reviews for limitedservice is pizza and flatbread. These are items that generate a lot of activity online and guests have high expectations for them.

The Restaurant Guest Satisfaction Snapshot (free report) will be published tomorrow morning. You can sign up to receive a notification when it goes live by filling out the form at the bottom of this webpage.

 

 

Key Insights – January 12, 2020

 

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending January 3)

 

  • Comp sales for the week improved and returned to the yearoveryear growth rates we saw in the beginning of November. 
  • Comp traffic growth also improved but not at the same rate as comp sales. 
  • Average spending per guest increased sharply during the week. 
  • Casual dining, fine dining, upscale casual and family dining saw the biggest jumps in comp sales improvements during the week. This suggests pent up demand amplified by the holiday, and perhaps also a boost in consumer confidence from second-round stimulus checks, translated into better week for restaurants. Next week’s results will be crucial in determining if this was a temporary jump or a more permanent shift in the sales and traffic growth trends. 

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  • Dine-in comp sales growth remains negative for both limited* and full-service** restaurants, but the latest week saw a considerable improvement for full-service brands.  
  • Limited-service dine-in sales growth dropped compared to the previous week. 
  • Off-premise*** sales growth accelerated sharply for all restaurant segments. 
  • Idaho, Mississippi, Alabama, Utah, Georgia, Arkansas, South Carolina, Tennessee and South Dakota all achieved positive comp sales growth and were the best performing states during the week. 
  • The worst performing states were Washington, Pennsylvania, New Mexico, California, Alaska, Michigan, Oregon, Minnesota and Illinois. The District of Columbia’s performance would also place them on the list of worst performing states. 

 

The Restaurant Industry Snapshot will be released later this week, subscribe here before prices increase. Restaurant operators receive a 75% discount, email shop@blackboxintelligence.com for your special discount code.

 

*Limited-Service: quick service and fast casual
**Full-Service: casual dining, family dining, upscale casual and fine dining
***Off premise: restaurant to-go, delivery and drive-thru where applicable  

 

Consumer Trends

Powered by Black Box Consumer Intelligence™

 

  • As of Q4 2020, African American spend growth at full-service restaurants fell the least among other ethnic/racial cohorts, well above the spending of all others. Their spend has also improved the most since Q2 2020. 
  • Compared to Q3, African AmericansHispanics and Asians all strongly increased spend growth. The improvement in full-service restaurant spending was roughly 5-8% percentage points. 
  • Spend growth was flat vs. the previous quarter for the Caucasian cohort – which now ranks third out of these four groups in terms of full service spend growth recovery.  
  • The Asian cohort remains in the fourth spot as the racial/ethnic group with the biggest decline in yearoveryear spending at full-service restaurants. 

Download the latest guide: 6 Ways to Use Consumer Intelligence in 2021

 

Guest Trends


Insights from Black Box Guest Intelligence™
  • December saw a significant improvement in restaurant guest sentiment for to-go offerings in both full-service and limited-service restaurants. 
  • In full-service, the improvement in sentiment coincides with an acceleration of yearoveryear growth of to-go sales. As restaurants saw an upswing in their to-go sales, they were able to better meet their guests’ expectations. 
  • On the contrary, delivery guest sentiment in full-service worsened slightly during DecemberDelivery sentiment in limited-service saw only a modest improvement compared to the previous month. 
  • Dine-in sales continue to see the best guest sentiment compared to the off-premise sales channels.  
  • There continues being a wide gap in guest sentiment scores between dine-in sales and to-go sentiment, and delivery sentiment remains at the bottomIn full-service, the gap between dine-in and the rest is even wider. 

 

 

Key Insights – January 6, 2020

 

 

Workforce Trends


Powered by Black Box Workforce Intelligence
  • The Coronavirus pandemic continues to impact the restaurant workforce according to the latest numbers from the Bureau of Labor Statistics.  
  • The number of restaurant jobs lost due to the pandemic remained at about 2.1 million employees during October and November. Employment in restaurants only fell slightly during November compared to the previous month. 
  • The weak labor market has fueled an environment in which wage pressures have been softened for frontline team members in limited-service restaurants; one of the largest groups of employees in the industry. 
  • Average hourly wages for limited-service frontline employees remained flat year over year at the national level during the third quarter. 
  • For full-service line cooks the story has been different. Average hourly wages for cooks increased rapidly year over year.  
  • Back of house positions were harder to fill before the pandemic and now may require some additional pay to attract and retain the best talent.  
  • As staffing levels were cut in full-service restaurants, those that remained were likely the most seasoned and tenured cooks, which also contributed to average wages showing bigger increases. 

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending December 27)
  • Comp sales and traffic for week were the worst experienced by the industry since mid-June. 
  • Average restaurant guest checks continue growing at a much faster pace year over year than the pre-pandemic norm. 
  • The best performing segments during the week based on comp sales were quick service and fast casual. Both segments achieved positive growth year over year. 
  • The upscale casual and fine dining segments had the worst comp sales results during the week. 
  • Fine dining brands experienced an improvement in sales during the week of Christmas. Although their sales were still down considerably year over year, the sales decline was much smaller during this holiday week, likely the effect of pentup demand for celebrating special occasions.  
  • After slowing down for the last four weeks, sales growth for off-premise* year over year accelerated during week for limited-service** restaurants.  
  • For full-service*** restaurants, off-premise sales growth declined and was the smallest it has been in the last eight weeks.  
  • The best performing regions of the country based on comp sales during the week were the Southeast, Southwest, Florida and Texas. 
  • The worst performing regions were California, New England, New York-New Jersey, and the Mid-Atlantic.  
  • In many of the poorly performing regions, colder winter weather seems to be a strong factor. But for California, which was the worst performing region amid its dramatic spike in COVID-19 cases, the tighter restrictions due to the virus are likely the driving factor. Comp sales growth has fallen by almost 25 percentage points compared to California’s performance the week before Thanksgiving. 

 

*Off premise: restaurant to-go, delivery and drive-thru where applicable  

**Limited-Service: quick service and fast casual 

***Full-Service: casual dining, family dining, upscale casual and fine dining 

 

Consumer Trends

Powered by Black Box Consumer Intelligence™

 

  • As restaurants look to technology for reduced customer friction, investments in online ordering continue changing the way guests order and pay. The ongoing pandemic has sped up this shift as consumers adopt new technologies to reduce health risks. 
  • The adoption of fullservice restaurant patrons to online payment has been quite pronounced. Beginning 2019 at a single-digit mix, it reached a low double-digit level before the pandemic and currently online payments represent roughly a quarter of sales.  
  • Just before the pandemic online sales were growing at 50% year over year and are currently tracking roughly 100%. 
  • Limitedservice restaurants are also witnessing a strong uptick in online payments. As early adopters of the new technology relative to their full-service counterparts, limitedservice restaurants are farther along the adoption cycle With an online mix in the mid-teens as of early 2019, online payments are currently tracking at double that level.  
  • The yearoveryear growth rate of online sales in limited-service is also roughly double the pre-pandemic levels. 
 
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Key Insights – December 22, 2020

 

Consumer Trends

Powered by Black Box Consumer Intelligence™

 

  • Total spending through third party delivery more than doubled by October and November compared to the 2020 pre-pandemic period.  
  • Both limited-service* and full-service** restaurants have more than doubled their third-party delivery sales during the period, the growth has been significantly larger for limited-service brands. 
  • Share of total third-party delivery spending has been growing for limited-service; during October and November, limited-service captured almost $3 of sales in third-party delivery for every dollar spent in full-service. 
  • Some demographics have seen an increase in their total third-party delivery spend compared to the pre-pandemic period including those with an annual income under $60K, ethnically diverse populations (African Americans and Hispanics) and households with children 
  • Younger adults (18-24) and older consumers (65+) have also increased their third-party delivery spending 

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending December 13)

 

  • The effect of the escalation of dine-in restrictions in California has been dramatic. The drop in comp sales in California compared to the previous week was almost 20 percentage points. By comparison, the region with the second-largest drop in comp sales only experienced an 8 percentage point decline.  
  • For five straight weeks now, comp sales have worsened compared to the previous week. 
  • With the sharp drop in comp sales during this week, the industry had its worst week since mid-June. 
  • Restaurant comp traffic has also been deteriorating. Comp traffic for the week was the worst seen since mid-July.  
  • The drop in sales was larger than the drop in traffic and we also saw a deceleration in average spend per guest. 
  • Despite a slowdown in sales for the industry, quick service is still achieving positive comp sales growth; and three weeks into December, fast casual is having its best month since before the pandemic. 
  • All full-service* segments saw a deterioration in comp sales growth during the week; upscale casual experiencing the biggest declines 
  • Year over year growth in off-premise** sales during week was the highest it has been since the beginning of October. 
  • The best performing regions based on comp sales during the week were the Southeast, Florida, Texas and the Southwest. 
  • The worst performing regions based on comp sales were California, New England, the Western region and the Mid-Atlantic. 

 

*Full service: casual dining, family dining, upscale casual and fine dining 

**Off-premise: restaurant to-go, delivery and drive-thru where applicable  

 

Key Insights – December 17, 2020

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending December 6)

 

  • The industry continues facing a much more challenging environment in recent weeks as indicated in larger sales declines. Comp sales for the last three weeks have been the worst for the industry since early August. 
  • Yearoveryear restaurant comp sales growth improved during the most recent week; this is most likely attributed to Thanksgiving negatively impacting sales last week. 
  • Restaurant comp sales were worse compared to what was reported two weeks ago, evidence that comp sales are trending in the wrong direction. 
  • Restaurant comp traffic followed the same trend, but traffic fell at a faster pace than sales over the last two weeks. 
  • The drop in comp sales was larger for full-service* restaurants than it was for limited-service**. 
  • Despite the drop in sales during the week, comp sales for limited-service restaurants remained positive year over year during the week. 
  • As COVID case numbers continue to rise and colder weather halts outdoor dining imany regions of the country, off-premise sales*** in full-service restaurants are picking up again. Off-premise sales growth year over year during the week was as high as it has been in the last nine weeks. 
  • Off-premise sales in limited-service restaurants remain elevated and their growth rate trend remains relatively flat in recent months. 
  • All states experienced negative comp sales during the week, but 16 were able to improve their comp sales results over the last two weeks. The states which made the biggest gains during the period were New Mexico, North Dakota, Wisconsin, Hawaii, Utah, Maryland, South Dakota, Idaho and Montana. The District of Columbia’s improvement would also place them among those with biggest gains in comp sales. 
  • The states that saw the biggest drops in comp sales over the last two weeks were Alaska, Minnesota, Kentucky, Colorado, Nevada, Michigan, Washington, California, Nebraska and Alabama. 

 

*Full service: casual dining, family dining, upscale casual and fine dining
**Limited service: quick service and fast casual
***Off premise: restaurant to-go, delivery and drive-thru where applicable  

 

Guest Trends


Insights from Black Box Guest Intelligence™

 

  • A major theme on the mind of restaurant guests continues to be cleanliness, with guests giving high marks to the industry. The percentage of positive mentions around “clean” has hit a new peak in December and its overall net sentiment gained 10 percentage points in October and November compared to the prior year. 
  • Guest chatter regarding the overall restaurant experience has been growing over the last few months, suggesting that some guests are looking beyond safety once again. Mentions based on experience, atmosphere and attentiveness are reaching the highest levels since the pandemic began. 
  • Similarly, large party chatter has also made a comeback. Restaurant guests are using words such as family, group and friends more frequently than other periods during the pandemic. This movement may also underscore a renewed focus on the experience component of a restaurant. But with the holiday season upon us, there is also significant pent-up demand for gathering with family and friends

 

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Key Insights – December 11, 2020

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending November 29)

 

  • Comp sales for week were the worst experienced by the industry since mid-July. This marks three consecutive weeks where year over year sales growth has declined compared to the previous week.
  • Only quick service and fast casual were able to achieve positive comp sales growth during the week. All other segments continue to experience negative comp sales growth. For a detailed look into the state of the casual dining segment, check out our most recent report here.
  • Comp traffic was also the worst results for the industry since mid-July.
  • Comp sales declined slightly more than traffic during the week, as growth in average spending per guest dropped during the week.
  • Off-premise sales*, as a percentage of total restaurant sales, has been increasing again over the last three weeks, with the highest increases happening in full-service restaurants**.
  • In recent weeks there has been a very sharp decrease in dine-in year over year sales growth for full-service restaurants. There has been also a drop in limited-service***, but it has been much more moderate.
  • All eleven regions of the country had negative comp sales growth during the week.
  • The regions with the best comp sales results were the Southeast, Florida, Texas and the Southwest. Weather seems to now be a bigger factor in restaurant sales, especially since many restaurants have been relying more on outdoor dining.
  • The regions with the biggest declines in sales during the week were California, New England, the Western region and New York-New Jersey. In California, the spike in COVID cases is likely the driving factor behind a steep drop in sales growth during the last two weeks.

*Off premise: restaurant to-go, delivery, and drive-thru where applicable

**Full service: casual dining, family dining, upscale casual and fine dining

***Limited service: quick service and fast casual

 

Guest Trends


Insights from Black Box Guest Intelligence™
  • COVID fatigue among consumers continues to be evident. Despite the rapid increase in new COVID cases, the number of online mentions of COVID-related terms in restaurant reviews and online comments continues to drop.
  • Online guest sentiment in November offered insight into some best performing menu items.
  • The Black Box Guest Intelligence data continues to show restaurants meeting guest expectations, more forgiving guests and guests that continue to rally behind and support restaurants.
  • Guest sentiment based on restaurant food, service and intent to return became more positive year over year during November.
  • For more information on guest trends please visit the November edition of our Restaurant Guest Satisfaction Snapshot.

 

Consumer Trends


Powered by Black Box Consumer Intelligence™
  • Download our latest [Free Guide]: 6 Was to Utilize Consumer Intelligence in 2021.
  • For the Thanksgiving holiday, consumers did the lion’s share of their grocery shopping a week earlier this year, likely to avoid large crowds as COVID cases are spiking across the U.S.
  • Restaurants continue to lose share of stomach to grocers, and the Thanksgiving holiday was no different.
  • Consumer behaviors continue showing more efficient shopping – higher average tickets while transaction counts are down vs. last year. This is probably the effect of consumers trying to reduce their shopping trips as much as possible.
  • Grocery stores are seeing the largest uptick in average ticket trends, followed by limited-service and full-service restaurants.
  • Year over year change in number of transactions at limited-service restaurants and groceries are down roughly the same level, while full-service restaurants continue to feel a disproportionate drop in transactions.

 

Key Insights – December 4, 2020

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending November 22)

 

  • Restaurant comp sales dropped to their lowest level since the first week of August, fueling fears for another restaurant downturn as COVID cases rise throughout the country and colder weather translates into less opportunities for outdoor dining. 
  • Read more on November’s results in the latest Restaurant Industry Snapshot: November Restaurant Industry Sales Signal a More Challenging Environment is Ahead.  
  • Reported comp sales every week in November were worse than any of the preceding 8 weeks back to the beginning of September. 
  • Restaurant comp traffic performance also softened during the week, the worst for the industry since the second week in August. 
  • Although change in average spending per guest year over over continues to be high compared to the pre-COVID norm, the last 2 weeks have seen a deceleration in average spend growth per guestIn fact, growth in average guest check had not been this low since early July. 
  • Dine-in sales growth fell for both limited-service* and full-service** restaurants during the week, but it was full-service that suffered the biggest losses. 
  • Yearoveryear growth in off-premise*** sales dropped for both limited-service and full-service restaurants during the week. This creates concerns that consumers may be becoming more cautious and shifting some of their food spend away from restaurants as they did at the beginning of the pandemic. 
  • Mississippi, Alabama, Georgia, North Carolina, South Carolina, Utah, Idaho, Arkansas, Tennessee and Louisiana had the best comp sales results during the week. 
  • The states with worst comp sales were New Mexico, Washington, Oregon, Illinois, Alaska, Michigan, Vermont, California and Rhode Island. The District of Columbia’s sales performance would also qualify among those worst performing states. 

 

*Limited service: quick service and fast casual
**Full service: casual dining, family dining, upscale casual and fine dining
*** Off premise: restaurant to-go, delivery, and drive-thru where applicable  

 

Consumer Trends


Powered by Black Box Consumer Intelligence™

 

  • Download our latest [Free Guide]: 6 Was to Utilize Consumer Intelligence in 2021. 
  • Full-service restaurants have been enduring the worst declines in sales due to the pandemic and has lost the most “share of stomach”.  
  • Older consumers (65+) continue seeing the biggest declines in their number of full-service restaurant visits year over year. Th55-64 age cohort with the second largest drops. 
  • The higher the income level, the larger the drop in full-service restaurant visits year over year. 
  • There are similar drops in full-service restaurant visits for Caucasian and Hispanic consumers, but the number of African Americans spending at these restaurants has held up much better. 
  • Homeowners have seen a slightly bigger decrease in full-service visits compared with those who rent their homes. 

 

Workforce Trends


Powered by Black Box Workforce Intelligence

 

  • According to the Bureau of Labor Statistics, as of October there were still over 2 million restaurant jobs that have been lost 
  • The rate at which new jobs have been added in recent months suggests it will take years for the restaurant workforce to return to its pre-pandemic level. 
  • Those restaurants in operation as of October were still staffing each location with less employees on average than they did pre-COVID. See more staffing strategies (plus comp, benefits and much more) in the 2020 edition of the Total Rewards Survey Results 
  • Although both full-service and limited-service restaurants are operating under lower staffing levels per location on average, the cuts continue to be deeper in full-service restaurants. Front of the house has been hit the hardest in terms of staffing cuts. 

 

Key Insights – November 20, 2020

 

Financial Trends

Powered by Black Box Financial Intelligence™
(based on data from the week ending November 8)

 

  • Restaurant comp sales for week were the second worst experienced by the industry since late August (the worst week was the week ending November 1 which was negatively impacted by Halloween being on a Saturday).  
  • The poor sales results can most likely be attributed to the fact that the general election took place during the week. 
  • While the industry experienced poor sales resultslimited-service* performance improved if compared to comp sales two weeks ago. Quick service and fast casual both improved their comp sales performance during the week.  
  • Fine dining and upscale casual saw the biggest drops in comp sales performance compared to where they were two weeks ago. This is also reminiscent of the first months of the pandemic when these segments saw the biggest drops in sales performance. 
  • Yearoveryear growth in off-premise** sales spiked up during the week. Off-premise sales growth during the week was the highest it has been in the last 9 weeks for limited service and the last 6 weeks for full service*** restaurants.  
  • Thirty-four states saw their restaurant yearoveryear comp sales worsen during the last 2 weeks. The hardest hit states were Illinois, Maine, Michigan, Vermont, Colorado, Washington, Alaska, Wyoming, MassachusettsConnecticut and New Hampshire. 
  • The states that improved their comp sales the most in the last 2 weeks were: South Dakota, Montana, Hawaii, Oklahoma, Arkansas, Maryland, Delaware, Minnesota, Alabamand Louisiana. Also, among the most improved is the District of Columbia. 

 

*Limited service: quick service and fast casual
** Off premise: restaurant to-go, delivery, and drive-thru where applicable  
***Full service: casual dining, family dining, upscale casual and fine dining 

 

Consumer Trends


Powered by Black Box Consumer Intelligence™

 

  • Download our latest [Free Guide]: 6 Was to Utilize Consumer Intelligence in 2021. 
  • During October, the number of unique consumers that spent some of their money at restaurants was lower than it was a year ago. The same holds true for consumers with children in their household as it does for those without children. 
  • The loss in the number of consumers spending at restaurants has been lower throughout the pandemic for those with children in their household. Consumers with children had smaller decreases in visiting both full-service and limited-service restaurants. 
  • Limited-service traffic declines are likely not noticeable as check growth in this category has been much higher, offsetting the drops in traffic. 
  • For full service, traffic has been slow to recover, and a considerable number of customers have not returned to the category.  
  • The gap between the loss of consumers with and without children in their household has been larger for full-service restaurants, with consumers without children seeing the biggest drops in traffic. During October, the yearoveryear drop in traffic for those without children was 5 percentage points worse than for those with children. 

 

Workforce Trends


Powered by Black Box Workforce Intelligence

 

  • As of September, restaurants that are open continued operating with lower staffing levels per location than they did before the pandemic. 
  • Although the drops in staffing levels have been relatively widespread, the biggest cuts remain in the front of the house for full-service restaurants. 

 

 

Key Insights – November 13, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending November 1)

 

  • Yearoveryear comp sales results were the worst experienced by the industry in the last ten weeks. 
  • Full-service* brands saw their comp sales fall during the week while limited-service** restaurants had flat comp sales compared to the week prior. 
  • Halloween falling on a Saturday could be to blame for most of the decline in sales during the week for the industry overall and particularly for full-service restaurants 
  • COVID-19 cases reaching record levels is hurting restaurant sales and we expect that to continue, especially if government regulations begin to tighten again. 
  • Colder weather, which is an obstacle for most outdoor dining in large regions of the country, is expected to also be a factor going forward. 
  • All regions of the country saw a decline in their yearoveryear comp sales growth during the week. 
  • Regions that had the biggest drops in sales were New England, New York-New Jersey, the Mid-Atlantic and the Midwest; all regions where colder weather could be a bigger factor. 
  • The smallest declines in comp sales during the week were in Mountain Plains, Florida, the Southeast and the Western region. 

 

*Full-service: casual dining, family dining, upscale casual and fine dining
**Limited service: quick service and fast casual 

 

Guest Trends


Insights from Black Box Guest Intelligence™

 

  • Despite stalled growth in sales, restaurants saw strong guest sentiment in October. Read more in the Restaurant Guest Satisfaction snapshot HERE.   
  • Guest sentiment based on restaurant food, service and intent to return were all more positive during October this year than October 2019. 
  • Although the number of new positive COVID cases is spiking at an alarming rate, the online chatter centered around restaurant brands has seen a sharp decrease in the number of terms directly associated with the pandemic.  

 

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

  • As of October, grocery’s share of food spend still represented the category with the biggest gains compared to its average for January and February of this year. 
  • Limited-service restaurants also saw an increase in their share of food spend in October compared to their pre-pandemic norm, though the increase was not as big as that observed for grocery sales. 
  • Full-service restaurants continue to experience a loss in share compared to its pre-COVID norm. 
  • Both full-service and limited-service restaurants gained some ground in their “share of stomach” during October compared to their share in August. 
  • However, there are some signs based on the two weeks ending November 1 that there may be a reversal in the trend for rising restaurant share, particularly due to full-service restaurants beginning to lose ground again. The previously discussed factors of rising COVID cases and colder weather may be behind the reversal in the trend.

 

Key Insights – November 6, 2020

 

Workforce Trends


Insights from Black Box Workforce Intelligence

 

  • Turnover for restaurant hourly (non-management) employees and restaurant managers increased again during September. 
  • The impact of staff reductions at the restaurant unit level are expected to be felt for the next twelve months from, especially in the case of non-management employees. 
  • According to the Black Box Intelligence 2020 Total Rewards Survey, over a quarter of all restaurant companies reported eliminating bonuses for their restaurant managers in 2020.  

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending October 25)

 

  • Yearoveryear comp sales growth saw minimal growth compared to previous weeks. See more results from October in the just published Restaurant Industry Snapshot. 
  • The decline in sales growth speaks to a sales recovery that has significantly slowed down in October. 
  • A driving factor behind the slowdown may be the spike in COVID-19 cases, which started trending up again around the same time frame in October.  
  • Comp sales growth posted by the industry during the week was the second-worst results in the last six weeks. 
  • Comp traffic growth was the worst results experienced by the industry in the last six weeks. 
  • Dine-in sales growth year over year had been improving for full-service* restaurants since the end of July. However, dine-in sales growth flattened since mid-September and has not seen much improvement since. 
  • Off-premise sales***, although still growing at historically high rates for full-service restaurants, have continued to slowly taper off. 
  • For limited-service** restaurants, after seeing dine-in sales growth improve steadily since April, the last six weeks have begun to show the upward momentum slowing.  
  • Off-premise sales growth remains high for limited-service and continues to be a key driver of its success. 
  • All regions of the country experienced negative comp sales growth during the week. 
  • The Southeast, Southwest, the Western region and Mountain Plains were the best performing regions of the country during the week. 
  • The regions with the biggest declines in sales were California, New England, New York-New Jersey and the Midwest. 

 

*Full-service: casual dining, family dining, upscale casual and fine dining
**Limited service: quick service and fast casual
***Off-premise sales include to-go, delivery, and drive-thru where applicable  

 

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

  • Consumers between 18 and 34 years old represent a larger percentage of fullservice restaurant sales since the start of the pandemic.  
  • These younger and older (55 years and older) cohorts represent roughly the same share of spend, in stark contrast to the start of 2020 where older consumers spent roughly 50% more than their younger counterparts. 
  • In October, as the full-service segment continues to grapple with dine-in business challenges during the pandemic, spend growth remains negative for all age groups, including younger consumers. 
  • Older consumers have clearly cut back at fullservice restaurants, but they have offset some of the decline with increased spend at limitedservice brands. 
  • The share of spend by all age groups at limitedservice restaurants is now roughly the same as earlier in the year, before the pandemic. 

 

Key Insights – October 29, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending October 18)

 

  • For the second consecutive week, yearoveryear comp sales growth was worse compared to previous week’s performance. 
  • Comp sales for the week were the worst in the last five weeks and became the second worst week in almost two months. 
  • As the number of COVID cases rise in many areas of the country and colder weather makes outdoor dining much more challenging for restaurants, upcoming months will see some more starts and stops in its path to recovery. 
  • Restaurant comp traffic growth year over year also deteriorated during the week. 
  • The best performing segments during the week based on comp sales were quick service and fast casual (see the latest report on the State of the Fast Casual Segment HERE. Limited service* segments continue outperforming the rest of the industry by a wide margin. 
  • Yearoveryear growth in off-premise sales** has slowed down in recent weeks for limited-service brands. The off-premise growth during week was the lowest recorded since late April. 
  • Off-premise sales growth in full-service*** restaurants also continued its steady decline which started in early August. 
  • Despite the slowdown in yearoveryear growth, off-premise sales growth continues to be highly elevated for both limited-service and full-service restaurants compared with its pre-pandemic norm. The sales mix of off-premise also continues to be high for limited and full-service restaurants. 
  • The only daypart that has been able to achieve comp sales growth is mid-afternoon. The daypart with the worst comp sales performance continues to be late-night. 
  • Mississippi, Louisiana, Alabama, Georgia, South Carolina and North Carolina were the states with the best comp sales during the week. 
  • Alaska, Hawaii, California, North Dakota, Wyoming and the District of Columbia had the worst comp sales during the week. 

 

*Limited service: quick service and fast casual
**Off-premise sales include to-go, delivery, and drive-thru where applicable 
***Full-service: casual dining, family dining, upscale casual and fine dining 

 

Workforce Trends

Insights from the 2020 Black Box Workforce Intelligence™ Total Rewards Report

 

  • The average restaurant company reduced its non-management and management staff between March and June 2020 (for actual staffing level numbers, please see the 2020 report). Most restaurant companies do not expect to return to their pre-COVID staffing levels in the next 12 months.  
  • At the corporate office, marketing, human resources and accounting were the departments that saw the most reductions in their headcount. 
  • For more information and detail about the 2020 Total Rewards Survey resultsclick here.  

 

Guest Trends


Insights from Black Box Guest Intelligence™

 

  • Guest sentiment for delivery remains lower than for to-go and much lower than for dine-in. Despite the pandemic and the incremental reliance on delivery, guests still tend to perceive it as the least positive experience. 
  • Online reviews and comments reveal in many cases a bad to-go or delivery experience is lowering the guest’s stated intent to return to the restaurant even for dine-in. 

 

Key Insights – October 23, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending October 11)

 

  • After yearoveryear sales growth improved during each of the last three weeks. Comp sales for the week ending October 11 were the worst results reported since the second week of September. 
  • Comp traffic growth year over year also declined during the week, but the drop was not as big as the drop for comp sales. 
  • Average spending per guest also slowed down during the week. Yearoveryear growth for this metric was the lowest it has been since early September. 
  • Change in average spend per guest year over year declined for all segments compared to the previous week. The biggest drops were experienced by quick service and fast casual. See the State of the Fast Casual Segment in our most recent report. 
  • Although at a slower pace than limited-service*, full-service** restaurants also continue to experience growth in average guest checks greater than the growth they experienced all last year. The only exception is fine dining, which has seen little growth in guest checks year over year as a result of COVID. 
  • Alcohol sales in full-service restaurants have been slowly improving since the beginning of July. However, they are still trailing behind food sales growth by a wide margin. 

 

 *Limited service: quick service and fast casual 

**Full-service: casual dining, family dining, upscale casual and fine dining 

 

Workforce Trends

Insights from the 2020 Black Box Workforce Intelligence™ Total Rewards Report

 

  • On average, 70% of employees that work for the corporate office of a restaurant company are currently working from home. 
  • Most restaurant companies are planning on continuing to make changes to their corporate office workplace practices over the next 12 months in response to the pandemic.  
  • Only 11% of restaurant companies believe they will return to the same corporate office setting or practices they had preCOVID. 
  • Restaurant companies estimated that, on average, about 1 in 3 corporate office employees will still be working from home a year from now. 
  • For more information and detail about the 2020 Total Rewards Survey, click here.  

 

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

  • Full-service restaurants are among the categories of consumer spending that saw the most growth in Q3 compared to spending in Q2. Full-service restaurants were among the most negatively affected during Q2. 
  • Among those consumer spending categories that saw the biggest declines during Q3 compared to the previous quarter were online grocery, traditional grocery and wine and liquor store sales. These categories that grew very rapidly at the beginning of the pandemic but are now seeing the reversal in the trend.

 

 

 

Key Insights – October 15, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending October 4)

 

  • The week ending October 4th was the best performing week since early March.  
  • Restaurant sales & traffic results show upward momentum; still ground to cover. 
  • After four weeks of stagnant sales performance, year over year restaurant comp sales saw 1+ percentage point improvement over the previous week. 
  • Restaurant comp traffic experienced a comparable improvement during the week, suggesting that restaurant momentum may be picking up. 
  • All industry segments improved their comp sales performance during the week. See the most up-to-date metrics on the State of the Fast Casual Segment in our latest report.  
  • Fine dining and family dining, segments that have been underperforming the most in recent months, improved their comp sales performance the most during the week. 
  • Off-premise* sales in full-service** restaurants continues to grow at a high pace as a result of the pandemic. Although the rate of growth had slowed since the end of July, it started accelerating again at the beginning of September and has been trending up since. 
  • Off-premise sales are growing at an accelerated pace for ***limited service brands. Contrary to full-service, off-premise sales growth has remained fairly constant since May at a high rate. 
  • The Southeast, Southwest and Western region were the best performing regions of the country based on comp sales during the week. 
  • New England, California, New York-New Jersey and the Mid-Atlantic were the worst performing regions based on comp sales. 

 

* Off-premise: delivery, to-go and drive-thru where applicable
**Full-service: casual dining, family dining, upscale casual and fine dining
***Limited service: quick service and fast casual 

 

Guest Trends


Insights from Black Box Guest Intelligence™

 

  • Guest Sentiment Improves; New Drivers Behind Dining Decisions 
  • “Food” has shown the highest positive sentiment in September for limited service brands.  
  • For full-service brands, “ambiance” topped the charts with the most positive sentiment in September. 
  • Guest sentiment for “Food” and “Service” showed a considerable year-over-year improvement. 
  • Los Angeles was market with the most positive sentiment based on restaurant ambiance during September. 

 

Workforce Trends


Insights from Black Box Workforce Intelligence

 

  • Turnover continues rising. Rolling 12-month turnover rates for both restaurant hourly employees and managers increased again during August.  
  • Quick service staffing levels for non-management employees per restaurant are now consistent with the pre-COVID norm. However, the median fast casual restaurant chain is still operating their restaurants with a lower number of employees per location. 
  • Full-service restaurant staffing levels have made some gains since the height of the pandemic, but the median restaurant is still being operated with a reduced staff compared with the norm before the pandemic. The biggest cuts remain in the front of the house, but back of house staff continues to be lower than the norm. 

 

Key Insights – October 9, 2020

 

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending September 27)
  • Restaurant yearoveryear comp sales growth declined compared to last week’s performance for the second time in the last four weeks. The drop was driven by a deceleration in average guest spending growth. Comp traffic had a small uptick during the week. 
  • Despite uneven sales performance during September, yearoveryear sales growth during the month was an improvement over August 
  • September was the best month for the industry since February, view the latest performance metrics in: Restaurant Sales & Traffic Results Show Upward Momentum; Still Ground to Cover. 
  • Quick service continues being the top performing segment based on sales growth. The segment has now posted 22 consecutive months of positive comp sales growth.  
  • Fast casual continues to be the next best performing segment. Though achieving much better comp sales growth than full-service segments*, fast casual is still experiencing sales losses year over year. 
  • Casual dining was the best of the full-service segments based on comp sales growth. 
  • Off-premise sales continue to capture a larger share of total sales than their pre-COVID norm for both full-service and limited-service** restaurants. 
  • Although steadily recovering since July, alcoholic beverage yearoveryear sales in full-service restaurants remain trailing food sales by a very wide margin. 
  • Mississippi, Georgia, Montana, Alabama, South Carolina, Indiana and Utah were the best performing states based on comp sales results during the week.  
  • Hawaii, Alaska, District of Columbia, Vermont, California, New Hampshire, Wisconsin and Wyoming had the worst comp sales during the week. 

 

*Full-service: casual dining, family dining, upscale casual and fine dining 
* *Limited service: quick service and fast casual 

 

Workforce Trends


Insights from Black Box Workforce Intelligence

 

 

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

  • COVID-19 served as a catalyst for third-party delivery (3PD) companies (DoorDash, UberEats, Postmates, Grubhub) to accelerate their already strong growth. 3PD sales jumped +75% from mid-March to mid-April when most restaurant dining rooms across the nation were closed and consumers were limited to off-premise options. 
  • These 3PD services have been able to capitalize on this surge and sales continue to grow even as many restaurants have since reopened their dining rooms. In September 2020, 3PD sales were 28% higher than they were in April and 138% higher than they were in January of this year. 
  • In September, 68% of sales on 3PD apps went to limited-service restaurants with the remaining 32% going to full-service restaurants.  

 

 

 

Key Insights – October 2, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending September 20)

 

  • The restaurant industry’s sales continue to improve, but the pace at which they are improving has slowed down to a crawl. 
  • Comp sales for week were only 0.2 percentage points better than the average reported for the two previous weeks. 
  • Restaurant comp traffic improvement was marginally better than for sales during the week. 
  • Yearoveryear growth in average spending per guest continues to be elevated compared to the pre-pandemic period.  
  • Largest increases in average guest check growth continue to be in quick service and fast casual. The segments with lowest increases in check growth during the week were upscale casual and fine dining. 
  • Limited-service* restaurants continue outperforming the rest of the industry by a wide margin based on comp sales growth.  
  • In full-service**, casual dining has emerged as the clear winner based on comp sales growth. 
  • The Southeast, Southwest and Texas were the best performing regions of the country based on comp sales during the week. 
  • California, New York-New Jersey, New England and Florida regions had the worst comp sales results. 
  • The next Restaurant Industry Snapshot detailing the latest sales, traffic and workforce performance metrics for September will be published next week, make sure you’re subscribed HERE. 

 

* Limited service: quick service and fast casual 

**Full-service: casual dining, family dining, upscale casual and fine dining  

 

Guest Trends


Insights from Black Box Guest Intelligence™
  • Restaurant guests continue to frame their dining experiences and reviews around COVID-19. During the month of September, Black Box Guest Intelligence was still tracking thousands of reviews that specifically mentioned “coronavirus” or “COVID-19”. 
  • These reviews have become more positive in recent months as restaurants have continued to be intentional in their response and messaging to protect guests. In fact, the word “great” was the 3rd most mentioned word in coronavirus reviews during the month of September. 
  • Another recent theme in these reviews has been around restaurant “staff.” This theme climbed to the 8th most mentioned word in September coronavirus reviews, up from a ranking of 18th in July. Typically, when guests mentioned the staff, they were commending them for adhering to COVID-19 regulations. 

 

Key Insights – September 24, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending September 13)

 

  • Restaurant comp sales deteriorated compared with the previous week. This was expected given the unfavorable comparison due to the Labor Day holiday for the week ending September 13. In 2019, Labor Day fell on the first week of the month; thus, comp sales for the week of September 6 this year were positively impacted. The reverse of this impact was expected during the most recent week. 
  • Both of the last two weeks posted better comp sales than had been reported since the beginning of the pandemic. Labor Day holiday shift notwithstanding, the industry’s average comp sales for the last two weeks improved by over 3 percentage points from the average performance recorded for the previous four weeks. 
  • The same pattern was observed for comp traffic: the week ending September 13 was a little worse than the previous week, but the average for the two weeks (which minimizes the effect of any calendar shifts) shows there continues to be improvements for restaurants. 
  • The only segment that was able to achieve positive comp sales growth during the week was quick service, which now has 20 consecutive weeks of positive sales growth. 
  • Fast casual continues performing better than most, although the latest week saw a significant downturn in sales for the industry, likely the effect of the holiday. 
  • Fine dining and family dining remain the segments with the largest sales drops year over year. 
  • Compared to the pre-COVID level, about 10% of all chain restaurant locations remain completely closed. The percentage of closures is lower for limited-service* restaurants than for those in full-service**. 
  • The states with the strongest comp sales during the week were Utah, Idaho, Iowa, Mississippi, Alabama, Louisiana, South Dakota, Arizona, Minnesota and North Carolina. 
  • The states with the worst comp sales results were Hawaii, Alaska, California, New Mexico, North Dakota, Vermont, New Jersey, Washington and West Virginia. The District of Columbia’s comp sales performance would also put them among this group of states. 

 

* Limited service: quick service and fast casual 

**Full-service: casual dining, family dining, upscale casual and fine dining 

 

Workforce Trends


Insights from Black Box Workforce Intelligence

 

  • As of July, turnover rates continue to be elevated for many restaurant companies for both hourly, non-management employees as well as restaurant managers. 
  • The median quick service company has added staff per restaurant location compared with the pre-COVID period. 
  • However, in the case of fast casual and casual dining (both front of house and back of house positions), staffing levels per restaurant remain reduced. But the data shows hiring has been ongoing and staffing levels have increased in recent months. 
  • Hourly employee wages have increased faster for full-service restaurants than for those in limited-service. But in the case of general manager base salaries, Q2 yearoveryear growth was greater for limited-service brands than for full-service.  

 

 

Key Insights – September 17, 2020

 

Financial Trends

Insights from Black Box Financial Intelligence™
(based on data from the week ending September 6)

 

  • Restaurant sales accelerated their rate of recovery during the week, but it’s important to point out the calendar shift as a potential reason for that. Unlike the week ending September 6th, the comparable week included Labor Day in 2019. Restaurant sales during this holiday are typically lower. 
  • Comp sales have not improved this much week to week since early July. However, restaurant sales growth remains negative by a wide margin year over year. 
  • Comp traffic also improved compared to the previous week, although not as much as the rise in sales. 
  • Sales performance for limited-service* brands continues to be much better than the rest of the industry. 
  • Quick service posted its 19th consecutive week of positive comp sales growth. 
  • Fast casual comp sales were flat year over year, the first week the segment has not seen a yearoveryear drop in sales since the beginning of the pandemic. 
  • Full-service** restaurants once again improved comp sales performance during the week, but sales loss year over year remains over -15%. 
  • Charleston, SC, Myrtle Beach, SC, Wilmington, NC, Savannah, GA and Jacksonville, FL were the best performing markets during the week based on yearoveryear comp sales. 
  • California had many of the markets with greatest restaurant sales losses during the week. Seven of the fifteen lowest performing DMAs are located within the state: Palm Springs, Santa Barbara, Monterey, Fresno, San Francisco-Oakland, Los Angeles and Sacramento.

* Limited service: quick service and fast casual 

**Full-service: casual dining, family dining, upscale casual and fine dining
 

Consumer Trends


Insights from Black Box Consumer Intelligence™
  • Share of consumer food spend was as follows: grocery (67.3%), limited-service restaurants (23.2%), full-service restaurants (7.5%) and online grocery (2.0%). 
  • Share of food spend flowing to grocery stores has fallen every consecutive month since climbing to a high of 75.5% in March. As of September 6, grocery share was just 1.6% higher than its pre-COVID levels of 65.7%. 
  • Limited-service share is currently tracking 1.2% higher than pre-COVID levels while full-service share is tracking 2.9% lower.

 

Key Insights – September 11, 2020

 

Workforce Trends


Insights from Black Box Workforce Intelligence
  • Many restaurant companies that initially turned to furloughs to reduce their labor costs have transitioned to laying off employees in recent months. As a result, July turnover rates were higher compared to Q2 when the first effects of the pandemic hit the labor market. 
  • The largest increases in turnover during July were in full-service* restaurants, both for managers and for hourly, non-management employees. 
  • The need for initial staffing reduction was much smaller for limited-service** restaurants since the shift to off-premise*** favored their strengths in the marketplace.  
  • Limited-service continues capturing a greater share of restaurant sales than in the past and quick service concepts are experiencing a period of very rapid sales growth. As a result, July staffing levels had to be adjusted by most brands operating in limited-service 
  • The median restaurant company in quick service and fast casual are now operating with more staff per restaurant than they have in recent years.  
  • Turnover rates for non-management employees in limited-service increased only slightly in July compared to Q2, while management turnover remained flat.  
  • Register here to tune into the September 30th State of the Restaurant Workforce Webinar. This session is open to all restaurant operators. 

*Full-service: casual dining, family dining, upscale casual and fine dining  

** Limited service: quick service and fast casual 

***Off-premise: to-go, delivery and drive-thru 

Financial Trends

Insights from Black Box Financial Intelligence™

(based on data from the week ending August 30)
  • Comp sales growth year over year remained the same as the previous week and comp traffic improved slightly during the week 
  • All segments saw improved comp sales performance during week.  
  • Growth in average spend per guest slowed down but remains at historically high levels. 
  • QSR continues to be the best performing segment, by far, based on comp sales growth with 18 consecutive weeks of positive sales growth. 
  • The pace at which QSR sales are growing may be starting to slow down. 
  • Fine dining and upscale casual improved their sales performance the most. 
  • Recovery for alcoholic beverage sales has been slower due to the restricted dine-in capacity still in place and the larger than normal percentage of off-premise sales in full-service restaurants. 
  • Year over year off-premise sales growth for full-service restaurants remains at very elevated levels but has been continuously dropping slowly since the end of July. 
  • By contrast, off-premise growth in limited-service restaurants has remained growing at a high, relatively constant pace since mid-May. 
  • Mid-afternoon sales continue to be better than results seen for other daypartsthis daypart has achieved positive growth year over year in recent weeks. 
  • Late-night daypart sales continue struggling most and have trailed the other dayparts by a wide margin since the beginning of the pandemic. 
  • Utah, Mississippi, Alabama, Idaho, Iowa, North Carolina, Florida, Georgia, Arizona and South Dakota had the best comp sales results for the week. 
  • Alaska, Hawaii, New Mexico, California, New Jersey, Washington, Massachusetts, Wyoming, Wisconsin and the District of Columbia lost the most restaurant sales year over year during the week. 

 

Key Insights – September 4, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending August 23)

 

  • The industry had some small improvement in same-store sales growth year over year.  
  • August posted the best sales results since February, see full monthly analysis here.  
  • Restaurant traffic also experienced a small improvement compared to the previous week.  
  • Average spending per guest continues growing at an accelerated pace year over year. 
  • Average guest check growth for limited-service* segments have increased at the fastest rate; a persistent trend since the pandemic hit at the national level and off-premise-only became the norm. 
  • 10% of restaurants remain completely closed. This has remained constant over the last seven weeks, which suggests we may be at the point that these could represent permanent closures. 
  • About 20% of limited-service locations have not opened for dine-in and operate by off-premise only. 
  • On average, off-premise sales have represented 13% of all limited-service sales in the last four weeks. 
  • Over 60% of all sales have been through dine-in for full-service restaurants during each of the last four weeks. 
  • The Southeast, Mountain Plains and the Southwest were the best performing regions of the country based on same-store sales growth. 
  • California, New England and New York-New Jersey experienced the biggest loss in same-store sales year over year. 

*Limited service: quick service and fast casual

 

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

  • In August, 75% of restaurant spending went to limited-service concepts. While this is still higher than its pre-pandemic market share of 68%, full-service restaurants have continued to steal back share each consecutive month since April when limited-service brought in 82% of restaurant spending. 
  • Consumers also increased their spending at physical retail outlets in August (compared to July), though the monthly growth of +2% was slower than for restaurants. 
  • On the other hand, consumer travel spending continued to decline in August (compared to July), with spend on airlines down -2% and spend on cruises down -28%.

 

Key Insights – August 27, 2020

 

[Webinar]: Restaurant Operators Face a Second Pandemic: Racism & Social Injustice

This week, our president & CEO sat down with James Fripp, chief equity and inclusion officer for Yum! Brands and James Pogue, Ph.D., CEO of JP Enterprises and a leading voice on issues of Diversity, Inclusion and Bias. Together, they held a candid and open conversation on race, social advocacy and important steps to implementing diversity and inclusion initiatives that work and are needed now more than ever. Polling of the webinar audience revealed: 

    • 30% feel they are doing all they can to implement impactful diversity and inclusion initiatives, but know they need to do more.
    • When asked, the largest barriers to diversity and inclusion implementation are:
      • Too many other priorities 28%
      • Don’t know where to begin 25%
      • Lack of resources & funds to put a plan in place 20%
      • Lack of alignment & resources 17%
      • No one focused on it or championing it 11%

For more, check out the on-demand replay of the webinar HERE. 

 

Workforce Trends


Insights from Black Box Workforce Intelligence

 

      • The restaurant workforce was clearly upended by the pandemic with most chain restaurant companies forced to reduce staff. Compensation has been affected as well and we’re digging into the current state of employee compensation and benefits practices in our annual Total Rewards Survey. This edition of the research will also do a deep dive into the changing employee landscape due to the COVID-19 pandemic.  
      • Rhode Island, Indiana, Kansas, Michigan and Virginia experienced the largest year-over-year increases in hourly wages for line cooks in full-service during Q2. With the exception of Michigan, these increases are entirely market driven and not the result of minimum wage increase. 
      • Shift leaders in limited-service brands had larger year-over-year wage increases in Q2 in California, Colorado, Arizona, Illinois, Utah, Florida and the District of Columbia. Except for Utah, all others experienced minimum wage increases in 2020. 
 

Guest Trends


Insights from Black Box Guest Intelligence™

 

      • Third-party delivery restaurant guest net sentiment declined in July and August, down roughly 8 percentage points compared to January through June. As more restaurants open for dine-in and guests venture out, they seem to be less forgiving towards their third-party delivery experiences as they were at the height of the pandemic shutdown.  
      • While cleanliness and safety continue to be at the forefront of guests minds, other restaurant experiential themes are also in focus. Guests have been giving more credit to restaurants for service knowledge and food presentation. Net sentiment has improved by 10 points or more for each. See the latest Restaurant Guest Satisfaction Snapshot for July: Restaurant Staff Key to Maintaining a Clean and Safe Environment.

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending August 16)

 

      • Traffic experienced a small improvement during the week. Year-over-year comp traffic improved by 1+ percentage point compared to the previous week.  
      • Restaurant comp sales growth year over year remained virtually unchanged for the week. 
      • Quick service continues to be the only industry segment consistently achieving positive comp sales growth. With the week ending August 16, this segment experienced 16 weeks of positive sales growth year over year. Get a comprehensive look at the QSR segment in 2020 with this latest State of the Segment Report 
      • Family dining and fine dining comp sales struggled the most of all segments. 
      • Off-premise* sales growth year over year in full-service continues to be strong.  
      • Off-premise sales more than doubled year over year for full-service restaurants during the last two months. 
      • Limited service and full service off premise sales continue growing at an accelerated pace. Growth has stabilized in recent months and are not expected to achieve pre-pandemic levels anytime soon. 
      • The Southeast, Southwest and Mountain Plains regions saw the best comp sales results during the week; albeit all with negative comp sales growth. 
      • California, New York-New Jersey and New England experienced the greatest loss in comp sales year over year. 

*Off-premise: to-go, delivery and drive-thru 

 

 

Key Insights – August 20, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending August 9)

 

      • Restaurant comp sales and traffic experienced trivial improvement during the week ending August 9th compared to the prior week. The improvement over the last two weeks was less than 0.3 percentage points for both sales and traffic. 
      • Average guest checks have greatly accelerated their yearoveryear growth compared to historical averages. This has been a trend since early in the pandemic.  
      • Quick service remains the top performing segment based on sales growth, achieving its fifteenth week of positive comp sales growth. For an in depth look at the State of the QSR Segment, check out our latest report here.  
      • The quick service segment continues to have double-digit percentage point growth in their average guest checks followed by fast casual, which has also seen checks rise at an unusually high rate. 
      • Family dining had the worst comp sales results for the week.  
      • Comp sales performance improved the most for upscale casual, followed by fine dining. 
      • The mid-afternoon* daypart experienced flat or positive comp sales growth during six of the last eight weeks. This daypart had impressive sales growth before COVID-19 hit. 
      • The late-night daypart continues losing the most sales year over year, the trend since the beginning of the pandemic. 
      • The best performing states based on restaurant comp sales during the week were: Mississippi, Alabama, Utah, Louisiana, South Dakota, Georgia, Arkansas, Tennessee, Idaho and North Carolina. 
      • The states with the worst comp sales growth were: Alaska, New Mexico, California, New Jersey, Vermont, Maine, Washington, Hawaii, Massachusetts and the District of Columbia.

Guest Trends


Insights from Black Box Guest Intelligence™

 

      • As has been highlighted in recent months, cleanliness remains a top concern for guests when dining out. 
      • During July, casual dining had the highest percentage of positive online comments and reviews related to cleanliness. See the latest Restaurant Guest Satisfaction Snapshot for July: Restaurant Staff Key to Maintaining a Clean and Safe Environment. 
      • In limited-service, the segment with the highest cleanliness guest sentiment during July was fast casual.
         

Consumer Trends


Insights from Black Box Consumer Intelligence™

 

      • Between May and July, limited-service restaurants regained almost all the market share they lost to grocery stores in the first months of the pandemic.  
      • Full-service restaurants have had some gains in their food market share but are still significantly below their pre-pandemic levels. Grocery store share remains elevated as a result. 
      • Restaurant spending among younger consumers (those generation Z) recovered quickly and is almost to where it was pre-pandemic. 
      • By contrast, restaurant spend for older consumers remains much softer. By the end of July, consumers 55 years and older were spending 19% less in restaurants than they had in the same period a year ago. 

*Mid-afternoon sales: sales between 2pm and 5pm

 

 

Key Insights – August 14, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending August 2)
      • Restaurant comp sales improved slightly during the week ending August 2, but the improvement in yearoveryear growth from last week’s results was almost negligible. 
      • July sales and traffic were a mixed bag of results for the restaurant industry. See details here 
      • Since the week ending June 28 the industry’s recovery remains stagnant. Comp sales have fluctuated by less than 2.5 percentage points during each of the last six weeks.  
      •  July’s comp sales were -15%. While there is still a lot of ground for sales to cover before fully recovering, the recent pace of improvement suggests it probably will take a long time to get there. 
      • Restaurant comp traffic remained essentially unchanged from the previous week’s results. There has been little fluctuation in year over year traffic growth results in the last six weeks. 
      • Sales performance for limited-service brands declined slightly from last week based on comp sales growth. 
      • Quick service and fast casual segments continue outperforming full-service restaurants by a very wide margin. By week ending August 2, limited-service comp sales had been positive during four of the last five weeks. See a deep dive on the state of the QSR segment in our newest report. 
      • The segment with the biggest decline in comp sales year over year for week ending August 2 was family dining, followed by fine dining. 
      • After seeing a slowdown at the end of June and first week of July, comp sales for dine-in in full-service restaurants have been showing some small improvements in recent weeks.  
      • Of all chain restaurants existing in the pre-pandemic period, 12% in full-service and 7% in limited-service remain completely closed. These percentages have held relatively flat for the last four weeks. 
      • The best performing regions based on restaurant comp sales during the week were: the Southeast, Southwest and Mountain Plains. 
      • Regions with worst comp sales results during the week were: California, New York-New Jersey, New England and Florida. 

Guest Trends


Insights from Black Box Guest Intelligence™
      • Restaurant Staff Key to Retaining Guests by Maintaining a Clean & Safe Environment. Read more in the latest Restaurant Guest Satisfaction Snapshot.  
      • Consumer transaction data revealed that full-service restaurant spending was among the 10 categories most negatively impacted during Q2 compared to Q1. Other leisure-related categories affected the most included travel, cruises, lodging and airlines. 
      • Limited-service restaurants continue to be the clear winners in the market share battle within the leisure category. 

Workforce Trends


Insights from Black Box Workforce Intelligence
      • Although at the height of the pandemic over half of limited-service companies reported cutting staff through either furloughs or layoffs (or a combination of both). 
      • By June, the median company in quick service and in fast casual had increased their number of hourly employees per location compared to their pre-pandemic staffing levels. 
      •  The biggest drops in staffing compared with the pre-pandemic period occurred in the front-of-house, which is not surprising given the limited dine-in operation capacity still experienced by many restaurants. 
      • The Total Rewards Survey is open and accepting submissions. Read more about the industry leading survey here.

 


Key Insights – August 6, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending July 26)

 

 

      • The restaurant recovery continues to plateau as comp sales growth year over year remained relatively unchanged in July. [See July restaurant performance results here] 
      • Although there was a small improvement in comp sales during the week ending July 26 compared to the previous week, the industry’s performance returned to the same place it was two weeks ago. 
      • Quick service continues to be the strongest performing industry segment through the pandemic, by far. As of the end of July, quick service achieved thirteen consecutive weeks of positive comp sales growth. [See a full analysis of the State of the QSR Segment in our newest report.] 
      • The segments with the biggest declines in comp sales during the week were fine dining and family dining. 
      • After climbing back from a high of almost 20% of chain restaurant locations being closed at the height of the pandemic downturn, the percentage of restaurants that remains closed has flattened around 10% over the last month. 
      • The percentage of restaurant closures continues to be higher for full-service than for limited-service restaurants. 
      • Chicken, Burgers and Pizza Concepts are the cuisines seeing the strongest results. 
      • Restaurants in three states were able to achieve positive comp sales growth during the week: Mississippi, Alabama and Georgia. 
      • The worst performing states based on comp sales during week ending July 26 were New Mexico, California, New Jersey, Vermont, Maine, Hawaii, Massachusetts, Wyoming, District of Columbia and Washington. 

Guest Trends


Insights from Black Box Guest Intelligence™
      • Although still negative year over year, there is some good news for the industry in the fact that restaurant intent to return is increasingly more positive. July’s percentage of positive intent to return from online restaurant mentions and reviews was the highest it’s been since April, the first complete month affected by the pandemic at the national level. 
      • The regions with the highest intent to return net sentiment during July were Texas, the Western region, Florida and the Mid-Atlantic.

Workforce Trends


Insights from Black Box Workforce Intelligence
      • As their sales have improved strongly year over year and operations likely became more demanding due to the need of working to keep guests and employees safe, quick service restaurants added to their average hourly staff per location in June compared with the first months of the year. 
      • However, for full-service restaurants like those in casual dining and upscale casual, staffing has been reduced at all employee levels within their restaurants in June compared with the period immediately before the start of the pandemic. The biggest drops in staffing per location, as would be expected, have been among front-of-house non-management employees. With dining room capacity still severely constrained and the need to reduce costs due to lost sales, restaurants have been forced to adjust their staffing levels accordingly. 

 

 

Key Insights – July 31, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending July 19)

 

 

      • Restaurant sales recovery has completely stalled over the last four weeks as the number of COVID-19 cases continues to increase across the US. 
      • Traffic decline was the worst the industry has seen since the week ending June 14. 
      • Comp sales growth YOY for the industry was 1.1 percentage points worse during the week compared to the performance for the previous week; results were flat compared to the performance reported for the week ending July 5. 
      • Quick service has achieved twelve consecutive weeks of positive comp sales growth. Check out the new report, just released on the State of the QSR Segment.
      • Full-service* restaurants open for dine-in has declined. 
      • A larger percent of limitedservice** brands have remained closed for dine-in. Since off-premise sales are typically a much larger percentage of their sales, pandemic or no pandemic, operating only off-premise is a much more viable option. Limited-service brands have also closed restaurants at a faster pace than full-service.  
      • The percentage of limited-service restaurants offering dine-in service dropped by 10 percentage points compared to last week. The is the largest number we’ve seen since the last week of June. 
      • Off-premise sales (including to-go and delivery) for full-service restaurants posted their strongest growth YOY since the last week of May. 
      • Fast casual and family dining were the only segments that maintained flat year-over-year comp sales compared to the previous week 
      • Extensive financial and workforce updates for the month of July will be published next week. Stay in the know by subscribing to the Restaurant Industry Snapshot for the latest restaurant industry performance updates.

Restaurant Share of Wallet


Insights from Black Box Consumer Intelligence™
      • Despite losing significant ground at the beginning of the pandemic to grocery sales, restaurants have made significant progress regaining the share of food spend they lost. 
      • Although limited-service restaurant share of all food spend is almost at pre-pandemic levels, share for full-service restaurants is only slightly above half of what it was in the pre-pandemic period. 
      • Online groceries and meal kits sales continue growing at more than 50% year over year, but their overall adoption by consumers is very low.  

*Full Service: casual dining – fine dining
**Limited Service: quick service and fast casual 

 

Key Insights – July 23, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending July 12)

 

 

      • Restaurant comp sales growth year over year improved compared to the previous week; however, the rate at which sales are improving week over week is slowing down considerably. 
      • Comp traffic for the industry remained essentially flat. 
      • After twelve consecutive weeks of comp sales improvements for full-service restaurants, recovery has stagnated over the last three weeks.  
      • Limited-service restaurants continue faring much better. They have achieved positive year over year sales growth during the last two consecutive weeks. 
      • As the number of COVID-19 cases rise and new capacity restrictions are implemented at the regional level, the percentage of dine-in sales has decreased. During week ending July 12, 61% of all full-service restaurant sales were dine-in. This percentage increased steadily until reaching a high of 64% two weeks ago.  
      • In addition to some guests likely being more cautious and avoiding dining out in response to the rising health concerns, full-service restaurants seem to have hit a ceiling in terms of percentage of their restaurants that are open for dine-in business. After a steady climb since the end of April, the percentage of restaurants existing in the pre-COVID era that are now open for dine-in has plateaued around 87% for the last three weeks. 
      • By contrast, although the percentage of locations offering dine-in continues to rise for limited-service restaurants, many have opted to remain operating based on off-premise only, even if there may no longer be any restrictions to opening their dining rooms. By the week ending July 12, only 71% of limited-service restaurants that existed in the pre-pandemic period have their dining rooms open. 
      • As dine-in sales have slowed down for full-service restaurants, off-premise sales growth year over has picked up steam again. Off-premise sales growth for full-service restaurants had been slowing down as dine-in sales increased, but that trend has now been reversed in the last three weeks. 
      • For limited-service brands, off-premise sales growth year over year (including to-go, drive-thru and delivery), continues growing at an increasingly higher pace since mid-April. 
      • The best performing states based on comp sales growth during week were Louisiana, Mississippi, Alabama, Utah, Georgia, Idaho, South Dakota, Tennessee, Arkansas and Indiana. 
      • The states with the worst restaurant comp sales during the week were the District of Columbia, New Jersey, California, Vermont, Massachusetts, Maine, Washington, Connecticut, New Hampshire and Hawaii. 

Guest Trends


Insights from Black Box Guest Intelligence™
      • One theme that continues to be top of mind for restaurant guests is cleanliness. Guest net sentiment* for restaurant cleanliness been increasing in recent months. Additionally, the overall percentage of restaurant ambiance mentions that center on cleanliness has been steadily increasing each month since April.  
      • As guests started going back to dine-in at restaurants, a larger portion of the restaurant experience has been focused on safety and sanitation. And the good news is that as restaurant operators have had a chance to adapt to the new required heightened cleanliness protocols, the response from guests has been increasingly positive. 

 

*Net Sentiment: percentage of positive mentions minus percentage classified as negative. 

 

Key Insights – July 17, 2020

 

Voice of the Restaurant Operator


Black Box Intelligence™ operator poll via the Q3 State of the Industry Webinar Update July 16th
      • The environment for restaurants over the next 90 days will continue to be challenging. 2 out of every 3 operators and executives said they expect things to get worse for restaurants over the next three months. 
      • Safety is of the utmost concern for restaurant operators. Of the nearly 300 operators polled:
        – 96% are requiring masks for all restaurant staff 
        – 86% are removing some tables from their restaurants 
        – 77% take the temperature of their employees before a shift
        – 71% are requiring gloves for all restaurant staff
        – 57% have implemented plexiglass barriers (most common in limited service brands) 

Guest Trends


Insights from Black Box Guest Intelligence™
      • Cleanliness is the new ambiance! From April to June, net sentiment for “clean” increased almost 20 points. It’s clear that if there is one overarching concern for guests today, it is the need to feel safe. 
      • The latest Restaurant Guest Satisfaction Snapshot revealed that Online Sentiment Reflects Convergence of Employee and Guest Values. 
      • Social advocacy is the latest theme in online channels. 
      • Sentiment around ‘Food’ and ‘service’ had significant improvements in their percentage of positive guest mentions compared to May; both categories are now achieving growth in sentiment year over year. 
      • ‘Intent to return’ guest sentiment has been improving slowly. It was usual to find over 60% of all intent to return mentions classified as positive in the pre-pandemic period. To see June’s improvement, click here.  

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending July 5)

 

 

      • Comp sales worsened by almost 2 percentage points for the industry this week. See the latest sales and traffic performance for June here.
      • This year the drop in average sales was 9% during the week of July 4th. Although this holiday week typically means a decline in sales for restaurants, this year it was much worse. Over the last two years the week of 4th of July saw drops in average weekly sales dollars per restaurant of about 5% to 6% compared with the average 
      • Dine-in sales yearoveryear growth in full-service restaurants is trending down again in recent weeks while there has been an uptick in off-premise sales growth. 
      • Sales for limited-service brands continue to get better as guests shift their spending to more off-premise transactions but full-service segments are on a two-week slump. 
      • Quick service achieved its tenth consecutive week of strong positive comp sales growth and posted its second-best week in more than two years based on yearoveryear comp sales growth. Fast casual also improved their comp sales growth during week. 
      • Comp sales results declined during the week for the casual dining, family dining and upscale casual segments, however, fine dining is the segment that continues to improve the most. It was the hardest hit by the pandemic during the first few months but has come roaring back since dining room restrictions started to get lifted. It was the second best performing full-service segment based on comp sales for the week ending July 5th, only behind casual dining. 

Key Insights – July 10, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending June 28)

 

 

      • Restaurants sales continue improving. See the latest sales and traffic results here: Sales Improve but Restaurants Should Brace Themselves for Challenges Ahead.  
      • Excluding the previous two weeks (in which a shift in Father’s Day compared with last year affected sales results) the week ending June 28 had the best comp sales results for the industry since the week ending March 8; the week before a national emergency was declared due to the pandemic. 
      • Limited-service brands continue doing much better regarding sales growth year over year. 
      • Quick service has reached 9 consecutive weeks of strong positive comp sales growth. Results for this segment have been better than the growth rate they had been posting for years before the pandemic. 
      • Pace of recovery for fast casual brands has slowed down considerably, although results continue to be much better than for full-service restaurants. Comp sales improved by just one percentage point compared with the beginning of the month. 
      • Full-service segments, which are still down by a larger margin when it comes to comp salesare still finding room for recovering at a faster pace. 
      • At the national level, the industry seems to have hit a wall in terms of percentage of restaurants that are open in any capacity. By the end of June, 12% of all chain restaurants in operation before the pandemic remain completely closed, this percentage remained unchanged throughout the month. 
      • The reopening of dining rooms continues to be much slower for limited-service brands, with many restaurants choosing to continue to operate under off-premise only given their relatively higher volumes in those channels. 
      • Off-premise sales growth YOY continues slowing down for full-service brands since its peak back in mid-April through early May when it reached over 200% growth. 
      • Day parts performing best for the industry during June were mid-afternoon and dinner. Performance was not as strong for lunch or breakfast. The day part that continues to be hit the hardest by the pandemic is late night. 
      • The restaurant cuisines that were able to the best comp sales during June were chicken, pizza and hamburger.  
      • Best performing states during week ending June 28 based on comp sales were: Idaho, Mississippi, Alabama, Utah, Indiana, Michigan, Tennessee, Louisiana, South Dakota and Kentucky. 
      • Worst performing states during the week were: New Jersey, the District of Columbia, Massachusetts, Maine, New York, Connecticut, Vermont, Illinois, New Hampshire and Washington.

Key Insights – June 30, 2020

 

Consumer Trends


Insights from Black Box Consumer Intelligence™
      • Restaurant spend for Gen-Z consumers rebounded back to pre-crisis levels for the week ending June 21, reporting +1% YoY growth. Spending for this age cohort fell to a low of -41% for the week ending March 29.
      • Not surprisingly, consumers older than 65 had the steepest declines in restaurant spending, bottoming out at -59% for the week ending 3/29. Recovery has been slow for this age cohort and, as of June 21, their spending was still down -22%.
      • Besides the obvious explanation that older consumers feel more threatened by COVID-19, another factor at play is that older consumers historically allocate more of their restaurant spending to full-service restaurants.
      • In 2019, roughly 50% of restaurant spending by 65+ aged consumers went to full-service restaurants with the other 50% going to limited-service. Those spending patterns have significantly changed during the pandemic. In April, 65+ aged consumers increased their share at limited-service restaurants to 79%. While that allocation has been falling in recent weeks, this group is still spending 70% at limited-service for the most recent 30 days.
      • Contrast that to Gen-Z, who allocated 75% of their restaurant spending in 2019 to limited-service and 25% to full-service. That spread grew to 86% in April going to limited service at the height of the pandemic.

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending June 21)
      • Restaurants experienced a strong improvement in their comp sales during the week ending June 21. This was the best week for the industry since the week ending March 8 when the pandemic had still not had an effect at the national level. Performance results for June will be published in The Restaurant Industry Snapshot next Thursday, 7/9.
      • The improvement in sales during the latest week was largely due to a favorable shift in Father’s Day. Fine dining and upscale casual benefitted most from the shift from a comp sales perspective.
      • Contributing to the improvement in comp sales was an acceleration in YOY growth of average per person check.
      • There was very little change in restaurants reported as open; in any capacity during the week.
      • Only 89% of restaurants were open during the week; based on total chain restaurants open in the first 2 months of the year.
      • The percentage of restaurants that are open for dine-in continues to increase at the national level. The percentage of restaurants open is higher in states that reopened restaurants sooner and where the sales downturn due to COVID-19 was not as deep.
      • The percentage of full-service restaurants open for dine-in is much larger than the percentage offering dine-in in limited-service.
      • As dining rooms reopen, comp dine-in sales growth has naturally been improving in recent weeks for full-service restaurants. Limited-service lag in opening dining rooms is reflected in their much weaker dine-in sales growth.
      • As dine-in sales have been improving, particularly for full-service restaurants, YOY growth in off-premise sales continues to slow down.
      • States with the best comp sales results during the week were Mississippi, Alabama, Georgia, Idaho, Tennessee, Nevada, South Carolina, Utah, Louisiana and Kentucky.
      • States with the worst comp sales during the week were: District of Columbia, Massachusetts, New Jersey, Vermont, Connecticut, New York, Maine, Illinois, Pennsylvania and New Hampshire.

 

Key Insights – June 19, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending June 7)

 

 

      • Limited-service brands are reopening dining rooms at a slower pace than full-service. Given that the majority of their sales are typically off-premise (even in the pre-COVID era), waiting until dining room capacity restrictions are expanded and also until guests feel more comfortable dining out is a much more viable strategy for limited-service brands given their smaller reliance on dine-in sales.
      • Many restaurants that closed completely due to the pandemic have reopened by now. The percentage that remains closed has stayed constant for the last 3 weeks at the national level.
      • Even in the states that had open dining rooms for over a month (Texas and Florida), it seems we are approaching a ceiling in terms of number of restaurants that will remain beyond this crisis. The rest that have yet to reopen may represent many of the restaurant locations that are not likely to come back.
      • The percentage of restaurants open for dine-in has grown rapidly for full-service brands.
      • Comp sales and traffic continue improving for the industry overall. However, vast differences in sales performance remain between limited-service and full-service segments.
      • Limited-service brands continue posting much better comp sales results than full-service restaurants. Nonetheless the limited-service recovery trend has slowed down in recent weeks. Some consumer spending shifted back to full-service now that the option to dine in at those restaurants increasingly becomes an option throughout the country.
      • There continues to be strong improvements in full-service comp sales, particularly for family dining and fine dining, which have had the biggest improvements in recent weeks.
      • Best performing states during the week based on comp sales were Alabama, Mississippi, Idaho, Oklahoma, Georgia, Tennessee, Utah, Arkansas and South Carolina.
      • Worst performing states during the week based on comp sales were Vermont, Pennsylvania, Washington, New York, Michigan, Maine, New Jersey, Massachusetts, New Hampshire and the District of Columbia.

Guest Trends


Insights from Black Box Guest Intelligence™
      • As restaurants continue to reopen dining rooms around the nation, the gap between full-service and limited-service restaurant net sentiment has widened related to guest mentions of COVID-19.
      • For the rolling 7-day period ending on June 17th, net sentiment is 20% and 10% at full and limited Service restaurants, respectively. Net sentiment was roughly equal for both segments at the end of May.
      • At full-service restaurants, guest comments were particularly positive around guests returning to dining rooms and restaurant staff adhering to COVID-19 guidelines and safety procedures.

Key Insights – June 11, 2020

 

Guest Trends


Insights from Black Box Guest Intelligence™
      • Mirroring what happened to sales in May, restaurant guest sentiment has recovered in recent weeks (for more see the latest Restaurant Guest Satisfaction Snapshot). Although May saw significant YOY drops in both sales and sentiment, guest sentiment was worse in April.  
      • Restaurant service guest sentiment was 12.2 percentage points less positive YOY during May, while the drop in sentiment was 19.0 percentage points in April. 
      • Guest sentiment for restaurant food was 8.6 percentage points less positive YOY during May, also an improvement from the 11.6 percentage drop in positive sentiment experienced in April. 
      • The use of masks was a hot topic on social media by late May. Guests were vocal about their expectations regarding restaurant staff using masks and were quick to call out cases in which masks were being used incorrectly. 
      • There is increased guest vigilance and sensitivity related to overall cleanliness and sanitation practices at restaurants. Guests are on high alert and have been praising restaurant efforts, as well as pointing out instances in which restaurants have fell short. 
      • For additional guest trends during the month of May, see the latest Restaurant Guest Satisfaction Snapshot: Guests Focused on Restaurant Procedures that Ensure Safety. 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending May 31)
      • Sales continue recovering for the restaurant industry, which achieved its biggest improvement in YOY comp sales in the last six weeks during week ending May 31, according to the May Restaurant Industry Snapshot: Slow and Steady Recovery Continues for Restaurants.  
      • There continues to be a huge gap in comp sales performance (about 45 percentage points) between limited-service and full-service brands.
      • Quick service and fast casual remain the best performing segments based on comp sales. 
      • The family dining segment has had significant improvement in recent weeks and is no longer the second-worst performing segment, position it held since the beginning of the pandemic. 
      • The segments with worst comp sales results are fine dining (the segment most hurt by COVID-19) and now upscale casual. However, fine dining has also achieved significant improvement in comp sales during recent weeks as restaurant dining rooms continue reopening and expanding capacity. 
      • Guest checks continue growing YOY for limited-service brands, but the rate at which they are increasing has started to slow down. 
      • Guest checks for full-service restaurants, which had been falling YOY for months, are starting to show signs of recovery. 
      • Dine-in sales are returning quickly for full-service restaurants. For limited-service brands, the growth of dine-in has been slower. 
      • Best performing states based on comp sales during the week were Mississippi, Alabama, Oklahoma, Tennessee, Utah, Arkansas, Georgia, South Carolina, Idaho and Missouri. 
      • Worst performing states based on comp sales were New Mexico, New Hampshire, Maine, Massachusetts, Minnesota, Washington, New Jersey, Pennsylvania, Delaware and Rhode Island. 
      • For official performance benchmarks for May, visit the Restaurant Industry Snapshot: Slow and Steady Recovery Continues for Restaurants. 

Consumer Trends


Insights from Black Box Consumer Intelligence™
      • As many restaurants began reopening across the country in May, the restaurant category was able to get back 4.3% share of food spend from grocery stores. 
      • 2.9% of the overall share growth came from limited-service restaurants and 1.4% came from full-service restaurants. 
      • Despite an improvement in May as compared to April, full-service share of food spend is still well below what it was pre-pandemic. Given that most restaurant dining rooms were either mandated closed or subject to capacity constraints in May, it is expected that restaurants will continue to steal back share as these restrictions are lifted. 
      • Texas, which opened dining rooms at 25% capacity on May 1st was able to grow restaurant shareoffood spend faster. This was particularly true for full-service restaurants in Texas, which increased their shareoffood spend went up by 2.2% from April to May compared to the 1.4% increase that was seen at the national level.

Key Insights – June 4, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending May 24)
      • Restaurant sales and traffic once again improved at the national level during week ending May 24. You can performance for all of May HERE.
      • Limited-service companies continue seeing much better comp sales results than the rest of the industry, with quick service now even posting strong positive YOY growth in sales.
      • Family dining is starting to see an acceleration in its recovery as restaurants reopen for dine-in.
      • Upscale casual and fine dining were the two segments with the worst comp sales growth during the week. There was a considerable acceleration in the recovery for fine dining sales during the last week; however, the segment still has the lowest comp sales.
      • In states that have dining rooms open, dine-in sales represented over half of the total during the week.
      • Dine-in sales are coming back at a slower pace in limited-service restaurants.
      • As dine-in sales have started picking up, there continues to be a deceleration in YOY growth of off-premise sales.
      • The best performing states based on comp sales during the week were Alabama, Mississippi, Tennessee, Oklahoma, South Dakota, Idaho and Utah.
      • The worst performing states based on comp sales were New Jersey, California, Vermont, Washington, Minnesota, New Hampshire and New Mexico.
      • For performance results for the month of May, view our latest Snapshot update: Slow and Steady Recovery Continues for Restaurants.

Guest Trends


Insights from Black Box Guest Intelligence™

      • As states began reopening restaurants for dine-in service, service satisfaction scores improved.
      • At the national level, food satisfaction scores fell slightly in May. However, food scores improved for restaurants in Texas and Georgia (states that were open for dine-in service throughout most of May). This data confirms that COVID-19 has not changed the long-standing trend that guests are more satisfied with food served in a restaurant than food served via an off-premise channel.
      • Despite overt cleanliness efforts, “ambiance” satisfaction fell in May as compared to last year. Guests appear to be hypersensitive to cleanliness resulting in heightened expectations.

Consumer Trends


Insights from Black Box Consumer Intelligence™

      • Consumer spend on travel & leisure has fallen from 20% share of total wallet (pre-pandemic) to 10% as of week ending May 24.
      • Limited-service restaurants were capturing around 20% of the travel & leisure category pre-pandemic, but that share has jumped to 40% as airlines, ground transportation, cruises and recreation have seen steeper losses.
      • Despite stealing 20% of the travel & leisure category, limited-service restaurants share of total consumer wallet is roughly the same as pre-pandemic, while other categories like hardlines (home furnishings, electronics) and broadlines (online retail) increased their share.
      • Full-service restaurants represented 9.5% of the travel & leisure category pre-pandemic. This share fell to 6.7% as of the week ending March 22 but has since climbed back to 10.1% share as of May 24. As a share of total consumer wallet, full-service restaurant spend has fallen -0.85%.
      • While restaurants are outperforming travel and leisure peers like airlines and gyms, the overall category has significantly fallen due to COVID-19.

 

Key Insights – May 28, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
(based on data from the week ending May 17)
      • Restaurant sales change YOY continued improving during the week ending May 17. May results will be published next week in the Black Box Intelligence Restaurant Industry Snapshot.
      • Average check continues increasing rapidly for limited-service brands. However, growth in average spending per guest remains negative for full-service restaurants.
      • Fine dining and family dining continue to be the industry segments with the biggest declines in sales YOY. While all other segments are seeing faster improvement in their sales, fine dining has seen little improvement in their sales in the last month.
      • Consumer demand is strong in states that have started reopening to dine-in. Comp sales in those states that have had their dining rooms open since the beginning of the month are doing much better than at the national level for full-service restaurants. State results will be published in next week’s snapshot.
      • Comp sales in Texas, Florida and Georgia during the week for full-service industry segments were on average between 10 to 20 percentage points better than at the national level.
      • As dining rooms reopen, YOY growth in off-premise sales has begun slowing down slightly for full-service brands. However, for limited-service off-premise sales continue accelerating.
      • Best performing states based on industry comp sales during the week were Alabama, Mississippi, Arkansas, Oklahoma, Tennessee, Georgia and Utah.
      • Worst performing states during the week were New Jersey, Washington, Massachusetts, Vermont, Hawaii, New Hampshire, West Virginia, New Mexico, Maine (and Washington DC).
      • For full results, including May comp sales, traffic, regional and market performance, expert commentary and more, make sure you are subscribed to the Restaurant Industry Snapshot™ to be published June 4th.

Guest Trends


Insights from Black Box Guest Intelligence™

      • Guest sentiment for “off-premise” restaurant offerings improved in March as restaurants began shifting their efforts toward improving to-go and delivery operations.
      • However, off-premise sentiment scores fell in early May as states started to reopen dining rooms. Many guests complained of long wait times for curbside pickup orders.
      • Guest sentiment trends have started to recover as of the week ending May 24, with off-premise sentiment returning to similar levels as were seen in April.

Consumer Trends


Insights from Black Box Consumer Intelligence™

      • Third-party delivery (3PD) adoption continues to increase for consumers of all ages since the pandemic began. Gen-Z has had the most significant adoption rates, with over 14% of Gen-Z consumers using 3PD to order from a restaurant since March 15th of this year.
      • While only 2.3% of baby boomers used 3PD in the past two months, this reflects a growth of 50% compared to the same months in 2019.

 

Key Insights – May 20, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™

 

      • The slow but steady improvement for restaurants continued during the week ending May 10. Comp sales were -40% YOY for the week. This represented a 5 percentage point increase from last week’s YOY performance and almost 20 percentage points better than mid-April.
      • Limited-service brands continue performing better than full-service, with comp sales of -6.5% for the week. Within these companies, many of those classified under quick service are starting to see significant positive growth in their sales YOY. Quick service has posted 2 consecutive weeks of positive comp sales.
      • With a lot of dining rooms still closed and many others open at a limited capacity, full-service concepts keep experiencing much bigger drops in sales YOY, despite the improvements in recent weeks. Comp sales for full-service restaurants were –55% during the week ending May 10.
      • At the national level, dine-in comp sales were -95% for the week ending May 10. Quick service at -88% and casual dining at -91% are the segments leading in comp sales for dine-in. Casual dining dine-in comp sales were -97% last week, highlighting how the reopening of restaurants has benefitted this segment in particular.
      • Even if there has been some improvement in dine-in sales, at the national level, off-premise sales continue accelerating rapidly at a pace comparable to recent weeks. Comp sales for off-premise (delivery, drive-thru, to-go) grew by 202% YOY during the week for full-service restaurants; for limited-service brands, growth in off-premise was 31%.
      • Taking casual dining as a sample, the top 8 performing states during the week based on comp sales reflect the improvement in states that had dining rooms open during the week. The best performing states (Montana, North Dakota, Utah, Oklahoma, Tennessee, Georgia, Texas and Florida) had a casual dining comp sales average of -34%. The average for the rest of the country was -52%.
      • Using the largest of these states as a sample for analysis (Tennessee, Georgia, Texas and Florida) dine-in comp sales averaged -68% for casual dining in these 4 states (23 percentage points better than the national benchmark).
      • As dine-in sales are picking up, to-go sales are beginning to slow down in those states that are reopening. Average to-go comp sales for these states was 192% for week ending May 10. The average for these states over the last 2 weeks was 226%.
      • The reopening of dining rooms is having a significant impact on guest checks by improving beverage sales mix in those states. Beverage comp sales for those 4 states averaged -67% during the week, compared with -95% at the national level.

Consumer Trends


Insights from Black Box Consumer Intelligence

 

      • Florida and Tennessee have the highest rates of consumers buying directly from restaurants, either through dine-in or takeout orders. 8% of consumers in Tennessee ordered food or beverages at a full-service restaurant during the week ending May 10 based on credit and debit card transaction data. Florida saw 6.5% for the same metric.
      • All other states had less than 5% of their population purchase from full-service restaurants during the week.
      • National grocery sales growth has held steady at around 15% for the last several weeks. An analysis of the states that opened their dining rooms last week (TX, GA, FL, TN) highlights that while full-service sales improved, grocery sales did not decline. This underlines that while some consumers are starting to engage with restaurants more frequently, the shift has not been meaningful enough yet to damper grocery sales growth.

Guest Trends


Insights from Black Box Guest Intelligence

 

      • Over the last 4 months, the restaurant industry experienced a sharp drop in total number of online reviews as well as in guest sentiment at the National level, as well as in Texas and Georgia.
      • Although counts and sentiment are low, Black Box Guest Intelligence captured almost as many reviews during the first few weeks of May, than there were in all of April. This shows excitement for restaurant spending but not quite evidence of a V-shaped recovery.
      • The increase in number of restaurant mentions relative to April has been greater in those major states in which restaurants are slowly starting to reopen such as Texas and Georgia.
      • While there has been a decline in sentiment around service speed, overall experience, and to-go in Texas and Georgia in May compared with April, there was an increase around ambiance and ambiance cleanliness. This is in part due to restaurants adapting to guests needs by establishing safety updates and precautions. Restaurants are now hyper focused on cleanliness and it is paying off in terms of improved guest sentiment around these areas.

Key Insights – May 13, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™

 

      • The number of restaurants reopening their dining rooms has steadily increased in recent days. As of Saturday, May 9, on average almost 30% of the restaurants operated by the companies that participated in our Restaurants Recovery Sales Flash survey opened their dining rooms in some capacity.
      • The impact of those dining rooms opening has been impactful in driving incremental sales for full-service restaurants. Over the last week, the difference between comp sales for full-service restaurants that have dining rooms open in some capacity and overall comp sales for full-service has ranged between 8% and 15%.
      • Dine-in sales still represent a small percentage of the total. During the last week, dine-in sales have represented an average 11% of total limited-service sales and 13% of total sales in full-service restaurants. This remains a dramatic shift for full-service, which tended to see roughly 86% to 88% of their sales coming through dine-in in the last year.
      • Comp sales for the industry were -45% during the week ending May 3, a 2.5 percentage point improvement since last week and the best result since week ending March 15.
      • Texas allowed dining rooms to open on May 1. The following analysis includes data for week ending May 3, which includes the first three days (Friday, Saturday and Sunday) of dining rooms open. This state was chosen for a deeper dive analysis given the size of its economy and the large number of restaurants operating within the state.
      • While casual dining’s YOY dine-in comp sales in Texas improved by almost 11 percentage points compared with the previous week, the improvement for fast casual and quick service were a much lower 3.4 percentage point change.
      • Texas to-go comp sales declined compared with previous weeks. After averaging +142% YOY growth for the last 2 weeks, to-go sales growth was up 123% during the week ending May 3.
      • Still down by more than 80% YOY in Texas, beverage sales YOY growth improved by 9 percentage points compared with the previous week for casual dining. Upscale casual improved beverage by 3 percentage points and fine dining by an industry leading 14 percentage points.
      • Breakfast and lunch were the only 2 dayparts that improved their comp sales results compared with the previous week in Texas during the week ending May 3. Lunch made the biggest gains at 5 percentage points.
      • However, the rest of the dayparts (mid-afternoon, dinner and late night) actually saw their comp sales YOY worsen during the week. This suggests guests may be favoring their local independent favorites for these dining occasions as dining rooms reopen.

Workforce Trends


Insights from Black Box Workforce Intelligence

From the recently published Workforce Response to COVID-19 Survey. Download the infographic on the side bar. Workforce Intelligence clients can download the full report in their EFC’s.

      • Despite many companies beginning to bring back employees from furlough, of those people employed by chain restaurants back in January, only 45% of them remain actively employed today on average.
      • Restaurant companies held on to most of their managers. Of those employed back in January, on average 75% of restaurant managers remain actively employed today.
      • Many of the employees that were separated through furloughs or lay offs are not expected to return to their former employer. About 25% of furloughed employees and 67% of laid off employees are not expected to return if given the opportunity.
      • Most companies are expecting to re-hire or bring back employees from furlough at the same base wages and salaries they had before.
      • Almost half of restaurant companies said they are adjusting their bonus criteria or performance goals in response to the pandemic.
      • Companies are focusing on ways to guarantee the safety of their employees and guests. Some of the most common measures taken include requiring all employees to wear masks and gloves, adding plexi-glass shields to customer facing stations such as host/hostess stands and counters, taking temperature of employees, removing tables and providing hand sanitizer throughout the restaurants.
      • A few companies are planning to stop receiving cash and some even plan to discontinue the use of physical credit cards.

Key Insights – May 6, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™
      • It seems that under the environment prevalent the week ending April 26, the industry hit a ceiling in terms of its sales recovery, and it will probably take dining rooms to open in some capacity to see further jumps in comp sales performance.
      • For the week ending April 26, comp sales for the industry were -47.2%, which was essentially flat from the previous week. As a comparison, the industry improved its comp sales each week by an average of almost 7.0 percentage points in the previous 3-week period.
      • Full-service restaurants continue to lose sales at rapid pace. These brands lost 62% of their comp sales during the week. Limited-service restaurants continue faring much better, at -17% comp sales for the week.
      • Early data from a the newly launched Black Box Intelligence Restaurant Recovery Sales Flash shows that in Texas for Saturday, May 2 (the second day restaurant dining rooms were allowed to reopen in the state but at only 25% capacity), same-store sales for full-service restaurants dropped 36%, which is almost 30 percentage points better than the decline in sales recorded at the national level for that day.
      • Data from Texas and Georgia (both allowing dining rooms to be open in some capacity May 1), revealed that, on average, full-service restaurant operators only opened dining rooms in about 40% of their locations in Texas and 31% of them in Georgia that day.
      • Comp sales at the individual segment level showed little improvement for the week ending April 26, with the exception of quick service.
      • Quick service comp sales were less than -2% during the week, which makes it the only segment close to getting back to normal, pre-pandemic sales.
      • Average check per person or per transaction continues accelerating at a fast pace year over year in the case of limited-service restaurants. Quick service checks grew by 20% during the week, while growth was 16% for fast casual. However, guest checks continue dropping for full-service brands, largely due to lost beverage sales.
      • Allowing restaurants to sell alcoholic beverages for off-premise consumption has had very small positive impact on lost beverage sales in those states in which it has been authorized. Comp beverage sales for casual dining in Texas, Nebraska, Arizona, Connecticut and California (states that allow off-premise alcohol sales and were the best performers on alcoholic beverage sales growth) were all within -92% to -94% for the week. Although better than the -98% national beverage sales growth rate for casual dining, this represents only marginal improvement.

Guest Trends


Insights from Black Box Guest Intelligence

 

      • Guests reported a decrease in “food” satisfaction for the average restaurant during the last 3 weeks as compared to before the pandemic. Food satisfaction has historically been much lower for off-premise orders than for dine-in orders, so this is not a surprising trend given the shift to off-premise.
      • However, overall “off-premise” mentions on Twitter and review sites have become more positive since before the pandemic began, suggesting that restaurants are improving their execution in these channels.
      • In this environment of uncertainty guests may be more aware of value even when interacting with upscale brands. Upscale casual and fine dining restaurants have seen more positive “value” mentions in the last three weeks than they did for the first three weeks in February, as they increasingly meet guest expectations in this area.

Key Insights – April 29, 2020

 

Financial Trends


Insights from Black Box Financial Intelligence™

 

      • Restaurants have now had 3 consecutive weeks in which YOY comp sales improved compared with the previous week.
      • Comp sales for the week ending April 19 were -47.6%, the best result posted by the industry since March 15 and an 11.3 percentage point improvement from last week’s comp sales.
      • All industry segments experienced an improvement in their comp sales results over the last 2 weeks.
      • Quick service continues to be the top performing segment; at -4% comp sales for the week ending April 19, quick service is close to start experience flat sales growth YOY.
      • Fine dining is the only segment that continues to experience comp sales worse than -80% and that has experienced little improvement over the last 5 weeks. Restaurant dine-in reopening, even if under very limited capacity, may be the only thing that could start reducing the rate at which this segment has been losing sales.
      • As would be expected, off-premise comp sales YOY continue growing at a rapidly accelerating pace as a result of the pandemic restrictions. For limited service brands, off-premise sales (including to-go, drive-thru, delivery and catering) increased by +20% YOY during the week. For full service brands, the increase in off-premise sales was +207% YOY.
      • Mid-afternoon and dinner were the best performing day parts based on comp sales during the week. Late night and lunch had the worst comp sales.
      • All 11 regions of the country improved comp sales results during the week ending April 19 in comparison with results for the previous week.
      • The worst performing regions based on comp sales continue to be those were major outbreaks of COVID-19 have occurred: California, New England, the Western region (which includes Washington state) and New York-New Jersey. All of these regions had comp sales worse than -55% during the week.

 

Consumer Trends


Insights from Black Box Consumer Intelligence

 

      • Wine and liquor stores have performed well throughout the pandemic with positive YOY sales growth of greater than 25% for the last 6 consecutive weeks. This strong growth may be at least partly motivated by replacement of alcoholic beverages previously consumed at restaurants. Alcoholic beverage sales growth in casual dining, upscale casual and fine dining has averaged about -98% YOY over the last 4 weeks.
      • Convenience store sales did not deteriorate as quickly as restaurant sales, but they have steadily declined over the last 4 weeks and are down -36% YOY as of  the week ending April 19.
      • While third party delivery (3PD) sales volume has increased for all days of the week during the COVID-19 crisis, weekends remain the most popular time to order. 37% of all 3PD sales in the last 30 days occurred on a Saturday or a Sunday.

 

Dear Restaurants,

From our family to yours, this message is for you…

Coronavirus and the Restaurant Industry:

Key Insights – April 23, 2020

 

Financial Trends
Insights from Black Box Financial Intelligence

  • Comp sales growth improved for the second consecutive week YOY compared to the previous week, providing more evidence that the worst of the sales erosion because of COVID-19 may be behind us.
  • Comp sales and traffic for the industry were both -59% during the week ending April 12; this is the first time in the last 4 weeks when the industry posted comp sales or traffic results better than -60%.
  • There continues to be a widening in average spending per guest in limited service vs. full-service concepts. While YOY growth in average guest check for limited service has grown at a pace of 10% or more the last 2 weeks, average spending per guest YOY for full-service restaurants is declining.
  • All industry segments except for fast casual experienced an improvement in their YOY comp sales compared with the previous week’s performance. Fast casual had a 1.1 percentage point decline in comp sales vs. the previous week, but this could simply be the effect of Easter offsetting any improvement in weekly sales achieved by this segment during the week.
  • Family and fine dining are the segments that continue to experience the biggest drops in sales.
  • The best performing restaurant cuisines based on comp sales during the week were pizza, chicken and hamburgers. All of them had comp sales better than -30% during the week.
  • Out of the 11 regions of the country, only California did not improve its YOY comp sales compared with the previous week.

 

Consumer Trends
Insights from Black Box Consumer Intelligence

  • Share of food spend remained at 78% for grocery stores during the first 2 weeks of April. That represents an increase of 3 percentage points from grocery’s share back in March.
  • As the industry shifted to off-premise only in response to COVID-19, the number of unique guests ordering meals through third-party delivery has grown by about 60% for limited-service restaurants. Growth in unique users for full-service has doubled YOY.
  • Despite the rapid increase in third-party delivery adoption, off-premise sales for restaurants continue to be predominantly through the restaurants direct off-premise channels (drive-thru, curbside pickups, takeout, restaurants’ own delivery, etc.).

 

Guest Trends
Insights from Black Box Guest Intelligence

  • There has been diverging trends in guest sentiment towards restaurant off-premise offerings among limited-service and full-service restaurants.
  • Limited service, which typically do a significant portion of their business through off-premise channels, initially saw an improvement in their guest sentiment related to both to-go and delivery. However, most of those initial gains were eroded in the latest weeks and guest sentiment is back to being relatively low.
  • For full-service restaurant, there was the same initial jump in guest sentiment for delivery and to-go offerings, and that improvement in sentiment has sustained through the last 4 weeks. Guests have a much more positive sentiment on off-premise offerings from full-service restaurants now compared with the pre-COVID-19 period.

Join us 4/28 to discuss restaurant reopening strategies for the next normal with Kelli Valade, Black Box Intelligence’s CEO & President, Snagajob CEO Mathieu Stevenson, Sweetgreen’s COO Sanjiv Razdan & Union Square Hospitality Group’s CPO, Patti Simpson. Click above to register.

 

Key Insights – April 15, 2020

 

Financial Trends
Insights from Black Box Financial Intelligence

  • Since the negative effect of COVID-19 reached a national scale mid-March, the week ending April 5 was the best for restaurants based on comp sales growth. There are some signs that the sales decline may have reached bottom in the last few weeks and the industry is now experiencing some slow improvement.
  • Comp sales for the industry were -62.3% for the week ending April 5, which represented a small 4.7 percentage point improvement from last week’s results.
  • The pattern of diverging trends in guest check growth continues. Average guest check for limited service brands continues to grow rapidly year over year, while guest checks for full-service brands are experiencing a sharp drop.
  • The biggest declines in comp sales continue to be in fine dining and family dining; both segments experienced comp sales declines worse than -80% during the week.
  • The late night and lunch day parts experienced the biggest declines in comp sales this week (both worse than -80%). The only day part with comp sales better than -70% was mid-afternoon (-64.7%).
  • Pizza concepts continue to experience the smallest decline in comp sales, but there is an encouraging sign in the fact that all cuisine types tracked by Black Box Intelligence had comp sales declining at a lower pace during the last week.

 

Consumer Trends
Insights from Black Box Consumer Intelligence

  • Consumers allocated 78% of their food spend towards grocery stores last week, up from 66% in January.
  • Full-service restaurants received only 3.3% of consumer food spend, down from 10% in January.
  • Share of food spend at limited-service restaurants was 16.5% for the prior week compared to 22% in January.
  • There is starting to be some consistency in grocery sales data with year-over-year growth of 16.6% for the most recent week.
  • The average transaction amount for consumers ordering from full-service restaurants on third party delivery (3PD) is up 19.2% compared to the same week last year.
  • There were twice as many consumers ordering from full-service restaurants through 3PD compared to the same week last year.

 

Workforce Trends
Insights from Black Box Workforce Intelligence

  • Most companies (67%) have put some of their employees on furlough in response to COVID-19; the percentage that have laid-off employees is much lower at 22%.
  • The percentage of restaurant companies that now offer paid sick leave for their hourly employees increased to 67%; the percentage is even higher for restaurant managers.
  • On average, companies that are offering extended benefits to their separated employees are providing an additional 8 weeks of health benefit coverage. Free or discounted meals are extended for 9-10 weeks at the time of separation.
  • Almost half of companies have cut base pay of their executives in response to the business downturn caused by the pandemic.

Key Insights – April 9, 2020

 

Insights from Black Box Financial Intelligence

Week ending March 27, 2020

  • The week ending 3/27 was the second to show the impact of COVID-19 shelter-in-place and stay-at-home restrictions on a wide, national scale. Comp sales dropped by more than 60% for the industry, representing a 2.1 percentage point decline from the previous week.
  • The ability to fare better has been linked mostly to the strength of off-premise business before the pandemic hit, followed by the ability to quickly pivot to ramp up those off-premise offerings in recent weeks.
  • For full service restaurants, checks are declining rapidly: average guest checks changed by -43% for fine dining, -7.3% for family dining, and -6.6% for casual dining.
  • As usual routines got increasingly disrupted, the breakfast daypart saw a significant drop in sales during the week. Breakfast comp sales were -80%, which represented a 19 percentage point drop in performance from the previous week.
  • Pizza concepts are holding up the best in the current environment, down 15% in comp sales, followed by Chicken and Hamburger (-30% to -32%). Performance across all cuisine types vary widely, with bottom performers within the Breakfast-centric concepts and Bar & Grill declining -83% and -74%, respectively.

Insights from Black Box Consumer Intelligence

Week ending March 27, 2020

  • Grocery sales are starting to stabilize with YoY growth for the recent week at +15.5%. Last week grocery sales growth was +73.6%, likely the effect of consumers stocking up on supplies for upcoming days and weeks. Online grocery sales growth remains high for the current week, up +62.3%.
  • Limited-service restaurants experienced an increase in share of consumer food spend by 3% week over week, as grocery stores saw a 2% pullback and full-service lost another 1%.
  • While restaurant spend continues to decline for all age cohorts, the average restaurant is seeing a larger mix of spend coming from Millennials and Gen Z consumers than it did a year ago.
  • 72% of consumers who were dining weekly at full-service restaurants in early 2020 stopped spending at full-service restaurants during the week. Similarly, limited-service restaurants lost 35% of their regular weekly guests.
  • High-frequency spenders still exist among the consumers that have not eliminated their restaurant spend. Of those consumers that spent any money on restaurants during the week, 39% made at least 5 or more restaurant transactions during the period.

Insights from Black Box Guest Intelligence

Week ending April 5, 2020

  • Conversation around delivery and takeout on social media has fallen over the last 2 weeks with 15% fewer off-premise mentions in the week ending 4/5 than when it had spiked for the week ending 3/22.
  • For 2 consecutive weeks, guest satisfaction for takeout has grown more positive while delivery satisfaction has become more negative.

Key Insights – April 1, 2020

Black Box Intelligence clients are able to access a full report about the impact of Coronavirus on the restaurant industry. Financial Intelligence clients can find the report in the download section of their dashboard. Workforce Intelligence clients can download the report in the resource section of their Electronic Filing Cabinet (EFC).

To participate in the Sales and Traffic Tracker, please email marketing@blackboxintelligence.com (this is for restaurant operators only).

  • YOY Guest check growth for the industry slowed to 0.5% during week-ending 3/22, after averaging
    +2.5% for the previous 4 weeks. *
  • Most full-service restaurants were able to increase off-premise sales, but the offset of lost dine-in sales is
    low. *
  • Mid-afternoon sales daypart is holding up the best; late night is the worst. *
  • Full-service in all states posted comp sales growth of -60% or below. Limited service had a wider range
    in comp sales performance. *
    Grocery sales are up 73% compared to the same week last year. **
  • Consumer share of stomach spend at full-service restaurants fell below 5%. **
  • Consumer visits are declining for restaurants and increasing for all forms of grocery stores. **
  • Consumers with higher income have reported the greatest declines in restaurant spending. **
  • Gen-Z YoY restaurant spend is down -22% compared to Baby Boomers (ages 65+) spend, down -43%. **
  • Off-premise guest sentiment 3x more positive in March for full-service restaurants (compared to
    February). ***
  • Takeout net sentiment jumps to 11.6 after months of negative scores. ***
  • Restaurants that promoted #TheGreatAmericanTakeout campaign on March 24th received 3x the
    amount of chatter and 2x higher net sentiment scores. ***

* Source: Black Box Financial Intelligence
** Source: Black Box Consumer Intelligence
*** Source: Black Box Guest Intelligence

Key Insights – March 25, 2020

Black Box Intelligence clients are able to access a full report about the impact of Coronavirus on the restaurant industry. Financial Intelligence clients can find the report in the download section of their dashboard. Workforce Intelligence clients can download the report in the resource section of their Electronic Filing Cabinet (EFC).

To participate in the Daily Sales and Traffic Tracker, please email marketing@blackboxintelligence.com (this is for restaurant operators only).

  • Black Box Intelligence™ Daily Tracker points towards restaurant comp sales declining rapidly at national level over the last week.*
    *Source: Black Box Financial Intelligence
  • Off-premise sales reached over +60% growth year over year for full service brands and almost 30% for limited service brands as of March 23. *
    *Source: Black Box Financial Intelligence
  • Consistent with historical trends, satisfaction scores for consumers ordering delivery remain significantly lower than dine-in and takeout sentiment. **
    **Source: Black Box Guest Intelligence
  • Top coronavirus themes in restaurant reviews include (1) guests displaying their support for restaurants during the pandemic and (2) people using it as a platform to voice their opinion on restaurant staffing decisions. **
    **Source: Black Box Guest Intelligence
  • Grocery sales are up 52.9% compared to the same week last year. ***
    ***Source: Black Box Consumer Intelligence
  • Consumers shifted 10% of their share-of-stomach spend away from restaurants to groceries, ***
    ***Source: Black Box Consumer Intelligence

Key Insights – March 17, 2020

Black Box Intelligence clients are able to access an expanded, 7-page report about the impact of Coronavirus on the restaurant industry. Financial Intelligence clients can find the report in the download section of their dashboard. Workforce Intelligence clients can download the report in the resource section of their Electronic Filing Cabinet (EFC).

  • Comp traffic declines continue to be worse for full service (-3.7%) than for limited service restaurants –3.1%) for the week ending March 8th.*
    *Source: Black Box Financial Intelligence
  • Outbreak centers, major tourist and convention destinations suffer large traffic declines. Seattle’s comp traffic was –10.4% for the week (three times worse than the national average).*
    *Source: Black Box Financial Intelligence
  • In Seattle, comp dine-in traffic was -10.2% (8.5 percentage points lower than the previous week). Comp traffic fell by 30% at fine dining and upscale casual concepts.*
    *Source: Black Box Financial Intelligence
  • Consumer interest in COVID-19 continues rising rapidly according to Google searches. Online mentions related to restaurants are following the same growth pattern; 72% of online restaurant reviews containing “coronavirus” were posted in the last seven days (3/9-3/15).**
    **Source: Black Box Guest Intelligence
  • Upscale casual & fine dining chains seem to be adapting their practices to the COVID-19 challenge better than others according to guest feedback. These segments have the most positive sentiment when guests mention “coronavirus.”**
    **Source: Black Box Guest Intelligence
  • As restaurants shift to off-premise sales, third-party delivery may prove challenging given the very low adoption rates by consumers, especially those in older demographics. Only 4% of all consumers 18-24 years old placed a third-party delivery order the week ending 3/6; the percentage was less than 1% for those 55 and older.***
    ***Source: Black Box Consumer Intelligence
  • Consumers are continuing to shift food spend to grocery. Consumers decreased their share of food spend at restaurants by 2.8% nationally and by 5.7% in Seattle during the first week in March.***
    ***Source: Black Box Consumer Intelligence
  • Most companies already planning for restaurant closures. 60% of restaurant companies had already established contingency plans for closures as early as March 13.
    Source: Black Box Intelligence™
  • Enhancing sanitation procedures and implementing protocols for employees exposed to virus are the most common measures restaurants are focusing on regarding employee practices and procedures.
    Source: Black Box Intelligence™
  • Staffing difficulties for restaurants are increasing as a result of the outbreak. About a third of restaurants were already experiencing increased staffing challenges as of March 14.
    Source:
    Black Box Intelligence™
  • Most companies have paid sick leave policies for their restaurant managers but not their restaurant hourly employees.
    Source:
    Black Box Intelligence™

COVID-19 Deep Dive – Operator Survey – March 13, 2020

Last week over 200 operators responded to a survey on the Coronavirus outbreak and its initial impact on the restaurant industry. Key high-level findings can be found below, to request a complete copy of the results, email marketing@blackboxintelligence.com.

Key Insights

  • Almost 70% of restaurant companies had experienced a drop in traffic as a result of the COVID-19 outbreak. Restaurants most negatively impacted were those in upscale casual and fine dining; 85% of restaurant companies in this segment reported experiencing a decline in traffic.
  • About a third of companies first perceived a drop in their traffic as a result of the outbreak during the week of March 7. About a third of restaurant companies first experienced the decline in traffic a week later (week of March 14).
  • By March 13, the industry was not yet foreseeing a dramatic drop in their traffic. Half of companies said they
    expected the future traffic decline as a result of COVID-19 to be less than 10%.
  • The most commonly implemented measure or procedure in response to the outbreak has been enhancing sanitization protocols (96% of companies have implemented this measure), followed by implementing protocols for employees who have been ill or exposed to the virus to return to work (78% of respondents) and training employees on dealing with potentially ill customers (55% of respondents).
  • About a third of companies (this was consistent across all segments) reported they were already having additional staffing challenges due to the virus. These included employees calling in sick or not coming to work.
  • By March 13, almost half of restaurant companies responding to the survey said they had already banned or restricted travel for their employees.
  • Although over 80% of restaurant companies have paid sick leave policies restaurant management and corporate staff, about half (41%) offer paid sick leave to their restaurant hourly employees.
  • Many restaurants were already preparing for a potential escalation of the threat the virus poses to the industry. By March 13, 60% of restaurant companies that completed the survey said they had already established contingency plans for potential restaurant closures. However, the percentage of upscale casual and fine dining restaurants with closure contingency plans was the lowest of any segment. Only 33% of restaurants in those segments said they were prepared for restaurant closures.

 

Coronavirus and the Restaurant Industry:

Key Insights – March 11, 2020

Black Box Intelligence clients are able to access an expanded, 7-page report about the impact of Coronavirus on the restaurant industry. Financial Intelligence clients can find the report in the download section of their dashboard. Workforce Intelligence clients can download the report in the resource section of their Electronic Filing Cabinet (EFC).

  • In the market in which the first major outbreak occurred (Seattle), restaurant sales dropped by 10% during the initial week. However, this only includes a day or two of heightened public awareness. Real impact is expected to be over 20% in lost restaurant sales after one full week.*
    *Source: Black Box Financial Intelligence
  • Full service restaurants in Washington are seeing the most negative effect in terms of lost sales, especially those that are more upscale.*
    *Source: Black Box Financial Intelligence
  • Restaurant spending seems to be shifting away from full service restaurants towards limited service restaurants, at least initially.*** There is also an increase of to-go restaurant sales in the first market affected. Average to-go sales by restaurant location increased by 10.5% in Seattle during the week ending March 1.* These shifts seem to indicate that as concerns for the virus continue to rise, guests will likely favor quicker or off-premise dining experiences versus extended sit-down restaurant meals interacting with servers and sitting among other guests.
    *Source: Black Box Financial Intelligence
    ***Source: Black Box Consumer Intelligence
  • In Seattle restaurant spending from older guests (65+ years) dropped very significantly compared with their spending in the rest of the country during the week.*** This is the age group whose consumption is likely to be the most affected going forward as well.
    ***Source: Black Box Consumer Intelligence
  • Consumer data shows the categories that saw strong YOY growth in spending at the end of February were online grocery and meal kits.*** This could signal an upcoming trend as consumers shift more of their share-of-stomach spending towards options that allow them to avoid contact with other people while giving them more control over food preparation and hygiene.
    ***Source: Black Box Consumer Intelligence
  • Restaurant sentiment online is beginning to show heightened attention by guests to coronavirus related to food safety and cleanliness, as well as paying attention to signs of sickness among staff members.**
    **Source: Black Box Guest Intelligence
  • Initial areas of concern for restaurant sales decline due to the outbreak include cities and states with rapidly number of confirmed coronavirus cases, markets that are popular destinations for international travelers, markets that are hosts to large events such as conferences and trade shows.

 

COVID-19: Looking Ahead

It is hard to predict at this point what will be the pattern and speed of expansion of the coronavirus in the United States and what measures will have to be taken to slow its rate of spreading. These factors will likely have deep implications on restaurant performance during the rest of the year.

In addition to the headwind presented by this potential crisis, at least for the first quarter of the year the industry is experiencing some very favorable weather conditions which have led to very strong same-store sales growth results for the first months of the year. This will probably mask some of the negative effect of the coronavirus in restaurant YOY sales growth in upcoming weeks, at least at the national level.

What is expected for the upcoming weeks is sharp drops in restaurant sales specific to those locations in which major outbreaks occurred by the first week of March. San Francisco is a market where the downturn may be most apparent, particularly in terms of lost sales for full service restaurants.  For those brands strongly positioned in off-premise offerings there may be some uptick in to-go, delivery and drive-thru sales.

Markets in which major events are being cancelled will also experience a sharp decline in their same-store sales and traffic growth (think Austin due to the SXSW cancellation for the beginning of March).

At the national level it will probably take a few weeks before there is a meaningful erosion in restaurant sales, but that could change rapidly if panic accelerates and consumer confidence drops quickly.

Nevertheless, the global slowdown in economic activity, which is causing many economists to revise down their growth estimates for 2020, coupled with the possibility of the coronavirus outbreak directly hurting restaurants on a wider scale present strong concerns in an industry that continues to struggle with declining guest counts. In this new landscape, flat same-store sales for the year may be the new best-case scenario and declining sales a likely outcome.

Stay Tuned for Weekly Coronavirus Updates

Black Box Intelligence will continue to monitor the impact of coronavirus on the restaurant industry on a weekly basis. Check this page for updates as the situation evolves.

 

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