June once again showcased the restaurant industry’s resourcefulness and resilience. Efforts to face the crisis and provide improved safety to guests were rewarded with incremental sales compared with recent months. Same-store sales in restaurants were down 18.7% year over year in June, the best month for restaurants since February. The fact that this latest result represents a 35-percentage point improvement from April’s year-over-year sales growth clearly highlights how much ground the industry has covered since then.
Nonetheless, the challenges for the industry are far from over. First, restaurants contend with operating under an environment in which sales continue to be down by about 20% compared with the previous year. Second, the spike in COVID-19 cases in some of the largest states in the country is a warning sign that the recovery will not be smooth. In recent weeks, Black Box Financial Intelligence™ data is already indicating a slowdown in the sales recovery as a result.
Similarly, guest sentiment towards restaurants improved in June. Guests are rewarding the effort restaurants are making amid the pandemic. Food and service had significant improvements in their percentage of positive guest mentions compared with May and are now even achieving growth in sentiment year over year. The fact that there is a higher percentage of positive online mentions and reviews for restaurant food and service than a year ago highlights how much guests are rallying around restaurants and how forgiving and encouraging they have been throughout the many challenges restaurants are facing.
Intent to return guest sentiment has been improving more slowly. It was usual to find over 60% of all intent to return mentions classified as positive in the pre-pandemic period. The percentage was close to 50% in June, almost 10 percentage points lower than what was measured for June in 2019. Given that a large percentage of the population is worried about the virus, it is not surprising to find restaurant intent to return dipping even if other indicators are rising.
As restaurants began reopening to dine-in and guests returned, restaurant ambiance sentiment became much more positive. This naturally makes sense, considering it is unlikely that guests had much to say about ambiance when their interaction with restaurants was limited to picking up something through curbside pickup or the drive-thru window. Back in April only 34% of all ambiance-related mentions online were classified as positive. By May, restaurants in many states started to reopen their doors to dine-in and ambiance sentiment started to improve. Of all ambiance mentions in May 43% were classified as positive. The percentage of positive mentions during June improved again to 45% of all ambiance-related mentions.
The component of restaurant ambiance that stood out the most was cleanliness. From April to June net sentiment based on terms related to cleanliness improved by almost 20 percentage points. This is especially important today, given the hypervigilance from consumers regarding safety and sanitation as a result of the pandemic. Social media data tracked by Black Box Guest Intelligence ™ indicates that guests have high expectations in terms of what they see when visiting a restaurant. An area that stands out in this regard is the usage of masks, which at the end of the day is directly tied to the perception of cleanliness and safety. The fact that restaurant cleanliness net sentiment has improved so much is a good sign the efforts by restaurants to provide a heightened level of cleanliness and sanitation is being well received by guests. The stakes around cleanliness couldn’t be higher and restaurants are rising to the task.
The latest trend that has emerged based on social chatter related to restaurant brands has been an awareness and concern for social advocacy themes related to racism, injustice and the Black Lives Matter movement. Despite online conversations largely focused on COVID-related themes for months, social advocacy grew in momentum and became very relevant starting at the end of May.
Through their online posts, consumers have made clear these are causes they care about. Plus, they are being extremely vocal about what they expect from the restaurant brands they support. Many have made clear that beyond just looking for a good meal or service experience, they will favor only those restaurant companies that align with their values. And they are expecting those companies to make those values clear.
Equally important has been listening to the employee voice through their statements on social advocacy. These topics discussed today are especially close to the heart of many restaurant employees given the industry’s diverse employee population. Restaurant employees are going to social media to set their expectations of what they want to see and hear from their employers. Much like guests, many employees are looking for a clear stance from their employers on social issues.
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.