*2-year growth trends, as of June 2021
Same-store sales growth continued to slow down for restaurants in the third quarter of 2019, which became the first quarter in the last two years in which sales declined year over year. Sales growth was -0.4 percent for the third quarter of 2019 according to Financial Intelligence (formerly Black Box Intelligence). However, there was encouraging news for the industry in the fact that restaurants achieved small positive same-store sales growth of 0.1 percent in September, after experiencing two consecutive months of declining sales growth.
This weak sales growth is a consequence of an industry unable to reverse its continuous erosion of guests. Macroeconomic conditions have relaxed in recent months, which is not helping, and the industry also faced the negative effects of a major hurricane during the month which severely depressed sales in Florida.
From the consumer standpoint, confidence is beginning to weaken slightly as they become less positive about their current situation and their expectations in the near future.
Restaurant guests also became less positive during September regarding their stated intentions to visit restaurant brands tracked by Black Box Intelligence (formerly TDn2K)'s Guest Intelligence (formerly White Box Social Intelligence) in the future. Restaurant guest intent to return fell during September compared with August and year over year. Despite this drop in intent to return, restaurant guests were more positive during September than a year ago when it came to reviewing restaurant food and service. Rolling three-month average for these two attributes' guest sentiment is also more positive this year. This suggests it is the market conditions (oversaturation of restaurant options and increased competition) that is driving intent to return down and not necessarily restaurants delivering on a poor restaurant experience.
Though the norm is for restaurants to continue to experience traffic loss year over year, top performing brands are continuously bucking the trend. During the third quarter of 2019, top performing brands based on same-store sales growth achieved same-store traffic results that were almost 8.0 percentage points higher than brands with the worst sales results*. Top performing brands are able to actually grow their guest counts per restaurant by attracting new customers as well as holding on to their current guests.
Online reviews and comments show these top performing restaurants deliver on a better experience for their guest across multiple attributes like food, service and ambiance. Furthermore, the data reveals that the actual stated intent to return from those guests in their online posts does reflect differences in traffic performance. Top performing brands* received intent to return scores that were 14.4 percentage points higher than those of underperforming brands during the third quarter of 2019.
Guest social data has proven to be an indicator of restaurant performance, particularly when it comes to intent to return.
*Comparison based on top and bottom quartiles determined by same-store sales growth rates
The Restaurant Guest Satisfaction Snapshot (RGSS) is produced by data from Black Box Guest Intelligence™. Guest Intelligence is tracking over 190 brands to benchmark customer satisfaction and is the only online tool that integrates with operational performance data to validate the impact on financial performance. The data set focuses on six key attributes of the restaurant industry experience: food, service, ambiance, beverage, value and intent to return.
The RGSS algorithm determines the highest ranking brands based on sentiment. Brands included in this monthly snapshot must have a total of at least 250 mentions for the month. Restaurants must have a minimum number of units to be eligible as well. DMA rankings consider only the largest 25 areas.