RESTAURANT INDUSTRY PERFORMANCE PULSE: Click for weekly updates on the evolving impact of COVID-19 on the restaurant industryRESTAURANT INDUSTRY PERFORMANCE PULSE: Click for weekly updates on the evolving impact of COVID-19 on the restaurant industry
Restaurant same-store sales were 0.3% during February according to Black Box Financial Intelligence™. Although sales growth was modest during the month, it represented the second consecutive month of positive same-store sales growth for the industry. However, it is important to highlight the fact that unusually warm weather has undoubtedly played a part in boosting restaurant sales growth so far in the first quarter, particularly during January.
Restaurant online guest sentiment, as measured by Black Box Guest Intelligence™, shows a slight decline year over year in positive sentiment based on restaurant food and service. Service scores are particularly important for restaurants in recent years, as it continues to be the key attribute of the restaurant experience most consistently linked to top performing brands in the marketplace. Over 50% of all service-related online mentions and reviews during February described restaurant service as positive. This has been the only attribute, besides intent to return, which has reliably had over 50% positive mentions in recent months.
Additionally, the fact that intent to return sentiment continues to become more positive year over year provides some good news for restaurants. But there is plenty of bad news from factors external to the industry these days in the form of Coronavirus and global economic slowdown which suggest a downturn for the industry looms ahead.
To-go sales is one of the clear areas of opportunity for sales growth for the restaurant industry. For years, restaurants have experienced off-premise sales growth clearly outpacing their dine-in results. During 2019 same-store to-go sales growth was an outstanding 11.5 percentage points higher than dine-in same-store sales growth. In fact, if it wasn’t for to-go and other forms of off-premise sales, overall same-store sales would not have been positive for restaurants in 2019.
To capitalize on this trend and meet the consumers’ increasing interest in getting meals outside of the traditional restaurant dine-in setting, many restaurant brands have turned to third-party delivery providers. However, there are significant challenges when utilizing this new, popular channel. Besides the obvious question of profitability in the cases in which the restaurant is covering the delivery charges, there is also the question on what impact the delivery experience has on your brand’s perception in the market.
It is not surprising to find that there is a fall in food guest sentiment from when a guest rates food consumed at the restaurant and food that is delivered through a third-party provider. What is surprising was the large gap between the two in terms of food sentiment. Black Box Guest Intelligence data shows food net sentiment for dine-in is 33.7 percentage points higher than food sentiment when ordering through delivery. Although limited service brands fare better in delivery food sentiment than full service brands on average (which is understandable given the focus on off-premise meals from limited service brands, since they represent such a big portion of their business), quick service and fast casual brands also experience a drop in food sentiment when comparing dine-in vs. to go offerings.
As has been established in the past, operators in Orlando, FL should account for guests there simply being more positive than in the rest of major metropolitan areas of the country when rating their restaurant experiences. It is common to find this market as the one with the most positive sentiment across several restaurant attributes each month. During February, Orlando led major markets in the country in most positive net sentiment based on restaurant food, beverage and service.
The other market that emerged in February as having the strongest restaurant sentiment during the month was Philadelphia, PA. Restaurant guests there had the most positive net sentiment based on restaurant ambiance, value and intent to return.
On the opposite end of the spectrum, there were two markets that experienced the most dissatisfied restaurant guests during the month. As is common, there was a California DMA included among the least positive. Los Angeles guests were the least positive on their experiences based on restaurant beverages and value. Guests in Raleigh had the lowest net sentiment based on food, service, ambiance and intent to return.
The Restaurant Guest Satisfaction Snapshot is produced by data from Guest Intelligence™, a Black Box Intelligence Product™. 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 algorithm determining ranking brands is based on sentiment and determined by Black Box Guest 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.