Although November was the restaurant industry's third consecutive month of positive same-store sales growth, the real story behind these numbers was not encouraging. Thanksgiving was celebrated late this year, which meant it fell into December according to Financial Intelligence (formerly Black Box Intelligence)'s reporting calendar. This shift was instrumental in the industry achieving 1.6 same-store sales growth during November. Same-store sales for the first three weeks of the month (and thus free from the holiday distortion) were -0.3 percent, which highlights the magnitude of the Thanksgiving effect on November's final results.
Given that it is safe to say that November was a relatively soft month for restaurant sales, it is not surprising to find guest sentiment remained stagnant during the month according to Guest Intelligence (formerly White Box Social Intelligence)'s latest data. Sentiment based on restaurant food became slightly less positive year over year, while service sentiment only had a small uptick.
What is more concerning, however, is the slipping sentiment based on guests' intent to return to those restaurant brands they mentioned in online comments and reviews during November. Stated intent to return is continuously found to be closely associated with restaurant sales and traffic. Guests becoming less positive on this vital indicator does not bode well for an industry that continues to experience declining guest counts and is in a period of slowdown since the beginning of the year.
Despite the overall decline in sales and traffic growth throughout the year, there continues to be vast differences in performance at the brand level. There are restaurants that consistently thrive in this environment. These brands are better at delivering a superior experience to their guests and, as a result, get better guest sentiment scores online. And in the case of online reviews and comments, especially those that relate to intent to return, this positive sentiment can convert into better results as other potential guests perceive these comments as recommendations.
In the third quarter, top performing restaurant brands based on same-store sales growth (those in the top 25 percent), had sales growth that was 9.1 percentage points better than brands in the bottom quartile of performance. These top performing brands consistently score better in all attributes of guest sentiment, particularly intent to return.
Those same top performing restaurant brands had net sentiment scores based on intent to return 14.4 percentage points better than those that are struggling. Their guests are getting a great experience and are going online to share those experiences. These results suggest sustained performance in upcoming months as many of these satisfied guests reward them with additional visits and influence others searching online for places to dine.
There are differences in expectations in the way restaurant guests throughout the country approach rating their restaurant experiences. In general, most of those ratings and reviews can be classified as positive, although in the case of New York-New Jersey during November, less than 50 percent of restaurant feedback was considered to be positive. This region is frequently found among the least positive in the country when it comes to restaurant sentiment.
Only one region of the country had over 60 percent of its restaurant reviews and comments classified as positive during November. Florida once again became the region with the most positive restaurant sentiment and the only that achieved over 60 percent of its mentions classified as positive.
Restaurant companies operating in Florida, the Western region and the Mountain Plains must account for the fact that guests there tend to rate their restaurant experiences more positively when comparing across regions or against national sentiment numbers.
The Restaurant Guest Satisfaction Snapshot is produced by data from Guest Intelligence™, a Black Box Intelligence Product™. Guest Intelligence is tracking over 192 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 algorithm determining ranking brands is based on sentiment and determined by White Box Social Intelligence. 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.