*2-year growth trends, as of June 2021
Restaurant sales continue improving year over year, but the growth rate is slowing down. According to the latest Financial Intelligence (formerly Black Box Intelligence) data from Black Box Intelligence (formerly TDn2K), same-store sales growth was 0.2 percent during the second quarter of 2019, despite slightly negative growth in June.
Although this year-over-year growth is discouraging, it highlights the underlying conditions of the restaurant industry which have existed for years. There are too many restaurants and while consumer spending is stronger than recent years, it is far from robust. As the industry laps over months with stronger sales a year ago (as it is starting to do and will continue to face throughout the rest of the year), sales growth is expected to continue to decline.
Sentiment data from Guest Intelligence (formerly White Box Social Intelligence) reveals that guest intent to return improved slightly year over year during June. However, positive service and ambiance sentiment have been stumbling compared with the same months a year ago. These two attributes of the restaurant experience have consistently been found the strongest differentiating factors for top performing restaurant brands; thus, the ones guests seem to be placing a bigger weight when rating their overall experiences. The fact that their sentiment is beginning to fall should be a concern looking forward for chain restaurants.
Despite the stumbling sentiment for ambiance overall, top performing brands* based on sales have been able to achieve much better ambiance net sentiment scores than their competitors. More than food or beverage, ambiance most determine if a guest is likely to return. Of course, awful food will ruin a restaurant visit, but food executed within the intended parameters will not move the needle as much as a nice, inviting atmosphere throughout a guest's restaurant experience according to Black Box Intelligence (formerly TDn2K) research.
What do guests look for when describing a restaurant's ambiance? What are the key words have the highest value? The terms used most by guests when describing ambiance are "appearance," "clean,” and "décor.” It is important to highlight that appearance and especially cleanliness are things that can fall into operations and the people side of the business. Plus, they are things that can be worked on and improved every day.
We know ambiance is important in the eyes of the guest and it is a top differentiating factor among brands. But how different is performance? According to Black Box Intelligence (formerly TDn2K), restaurant brands that consistently had top same-store sales performance going back to 2017 had, on average, 12.7 percentage point higher net sentiment for their ambiance compared with the rest of the industry in 2019 as of June.
*based on same-store sales growth
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.