The good news continued for the restaurant industry during April. With same-store sales growth of 1.5 percent, April became the strongest month for the industry since September of 2015. The industry was even able to achieve small positive growth when comparing sales on a two-year basis, something that very rarely occurred during the last two years. This provided some new hope that we may be seeing a longer-term recovery in restaurant sales.
Meanwhile, online guest sentiment has mirrored this resurgence in the industry. Guests are increasingly satisfied with their restaurant experiences and saying they are more likely to return to brands they have visited in recent months. This also fuels optimism towards continued recovery for the industry.
April saw the highest percentage of positive “intent to return” online mentions by restaurant guests in the last three years. It also represented the biggest year-over-year improvement in percentage of positive “intent to return” mentions. However, there is an area of caution for the industry if indeed recovery is to be sustainable. There was a sharp drop in the percentage of positive service-related mentions during April. Given the importance that Black Box Intelligence (formerly TDn2K) research has placed on service as a differentiator for top performing brands), this will be a metric that will have to be studied closely in upcoming months. April could perhaps have been a data anomaly, or service levels may be starting to decline. Service-related problems would not be surprising, considering the severe turnover challenges faced by the industry today.
For the last year, restaurant operators have struggled to find and keep enough qualified employees. The fact is, the industry is experiencing historically high turnover rates for restaurant employees and managers. So there is plenty of reasons for operators to be worried about staffing levels.
As Black Box Intelligence (formerly TDn2K) research has shown, there is the clear connection between staffing, service, guest sentiment and its resulting effect on a brand’s sales and traffic. During the first quarter of 2018, top performing restaurant brands based on same-store sales reported higher net sentiment scores from their guests than underperforming brands based on sales. One of the critical differences between those same top performing and bottom performing brands based on sales growth: top performers had restaurant hourly employee turnover that was a substantial 29 percentage points lower than those brands in the low performing group.
This is undoubtedly a cycle in which brands with better retention provide better restaurant experiences, which results in higher guest sentiment. This translates into incremental sales and traffic, then circling back to creating an environment in which employees are likely to stay at their jobs longer.
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 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.