Restaurant sales stumbled again during August. Same-store sales growth was -0.7 percent, which meant August became the second consecutive month with declining sales year over year according to Black Box Intelligence (formerly TDn2K)'s Financial Intelligence (formerly Black Box Intelligence). Behind these weak sales was relentless guest traffic erosion the industry has been experiencing since the recession. Even though falling guest counts year over year are nothing new, traffic decline in recent months has simply been too big to be offset by growing average guest checks to push sales growth into positive territory. In fact, August and July were the two worst months based on same-store traffic growth in almost two years.
As sales have relaxed, so has positive sentiment by restaurant guests regarding their intent to return to the restaurant brands they are mentioning or reviewing online. Over the last few months, the percentage of positive intent to return mentions has been growing at a slower rate year over year and is displaying negative growth by August. Black Box Intelligence (formerly TDn2K) analysis has shown intent to return is the guest sentiment metric most consistently tied to restaurant sales and traffic performance.
Guest sentiment around service is another key metric predictive of restaurant performance in recent years. This metric also became less positive year over year during August, which is not an encouraging sign for an industry that is already experiencing faltering sales.
As sales have softened, so has positive sentiment by restaurant guests regarding their intent to return to the restaurant brands they are mentioning or reviewing online. The percentage of positive intent to return mentions has been growing at a slower rate year over year over the last few months, and is showing negative growth by August. Black Box Intelligence (formerly TDn2K) analysis has shown intent to return is the guest sentiment metric most consistently tied to restaurant sales and traffic performance.
Another key metric predictive of restaurant performance in recent years has been guest sentiment around service. This metric also became less positive year over year during August, which is not an encouraging sign for an industry that is already seeing its sales faltering.
Out of all aspects of the restaurant experience, ambiance is the attribute that has risen to the top as the one that most differentiates guest perception of those brands that are winning in the marketplace and those that fall to the middle of the pack. Restaurant brands that have consistently posted same-store sales growth leading the industry for the last three years have ambiance guest sentiment 12.7 percentage points higher than the average for the rest of the industry. No other attribute saw a larger spread in guest sentiment. Guests are signaling that, much more than food or beverage, a restaurant's ambiance is what will make them return and thus, reward that restaurant with incremental sales dollars.
But even within the larger concept of "ambiance," there are components of the restaurant experience that guests seem to be favoring. The spread in guest sentiment between brands doing consistently better on sales growth and the rest of the industry was bigger based more on restaurant cleanliness and overall appearance than the restaurant's decor. This suggests that the workforce component of the business goes beyond service, which is the second leading attribute based on differentiating the best from the rest. Attention to detail on cleanliness and maintenance, things like keeping tables bussed and the restrooms fresh, carry a lot of weight in the guest's mind. And operational discipline along those areas may be among the most important things a restaurant needs to focus on to succeed in the marketplace.
This data comes from the newly released "Best vs. the Rest" case study from the 2020 Restaurant Industry Planning Guide
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.