The restaurant industry is doing much better in 2018 than in previous years. July was another month of positive, albeit small, same-store sales growth for restaurants. According to Financial Intelligence (formerly Black Box Intelligence), for the year to date as of the end of July, sales growth was 0.3 percent for 2018. By contrast, sales results were worse than -1.0 percent for each of the last two years. It should come as no surprise that guests are reflecting a considerably more positive attitude toward returning and spending money at restaurant brands they are mentioning online. Over the last three months ending July 2018, an average 59% of all "intent to return" mentions had a positive sentiment behind them based on Guest Intelligence (formerly White Box Social Intelligence) data, indicating guests are more likely to visit those restaurants in the future. A year ago, that same average was only 39%. As intent to return sentiment has become increasingly positive, there has also been a jump in positive sentiment associated with restaurant service. Service guest sentiment improved by almost nine percentage points year over year during July. However, restaurants seem to be struggling with guest perception of their food. Black Box Intelligence (formerly TDn2K) research has shown, nevertheless, that service is a much bigger differentiator for sales at best in class restaurant brands than the food itself, which is good news for the industry based on the improving service scores.
As chain restaurants continue to struggle through years of decreasing guest counts and anemic same-store sales growth after two years of declining sales, it is more important than ever to determine the traits of top performing restaurant brands and the metrics that differentiate them from the rest. According to Black Box Intelligence (formerly TDn2K) studies, there is a clear connection between employee retention (particularly restaurant management retention), guest sentiment and a brand's sales and traffic growth results. Restaurant operators frequently mention staffing as one of the biggest challenges they are facing this year. But top performing companies, based on their same-store sales growth, are improving on manager retention. Based on Financial Intelligence (formerly Black Box Intelligence) numbers, during Q2 of 2018 these top performers saw restaurant manager annual turnover rates 21.8 percentage points lower than companies that had the worst sales growth results. At the same time, those restaurants with the highest sales growth rates also had guest sentiment that was 16.2 percentage points higher based on their intent to return. The data shows there is a perceivable difference in the guest experience, particularly for service, in top performing brands and this difference is frequently associated with superior employee retention.
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.