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At Black Box Intelligence (formerly TDn2K), as we study the state of the industry, our observation is that we’ve entered a new cycle, a cycle of opportunity. Sales are up, the job market is accelerating and online opportunities to connect with employees and consumers continue to emerge. How can restaurants best take advantage of this new cycle? One of the ways is to learn how to leverage data and insights; connected data and insights.
Last week at the Restaurant Leadership Conference, Black Box Intelligence (formerly TDn2K)’s Chairman Wally Doolin & Executive Director of Insights, Victor Fernandez sat down with White Castle CPO John Kelley, Dine Equity’s Director of FP&A Chris Cole and Gala Corps President and CEO Anand Gala to discuss the importance of connecting the data dots to win the ever increasing market share battle. Here are a few takeaways from the standing room only session:
- Benchmarking is more important than ever: Benchmarking solves the “me or the market” question. If sales are up by 1%, great. But what if the market, or even the segment is up by 2%? Internal benchmarking is a no-brainer, but benchmarking performance against the market, segment and industry is crucial to winning the market share battle.
- Sales are up! Total restaurant sales grew by 4.6% in Q4, year over year, producing the best quarter of 2014. Quarter to date comp sales growth is tracking just below 3% for Q1 2015, however we still haven’t seen consistent growth in traffic.
- Higher check doesn’t always mean lower turnover: Its no surprise that better pay is tied to lower turnover, but a common misconception is that a higher check is also associated with lower turnover. Not always the case. Panel member John Kelley, CPO of 94 year old QSR chain White Castle, boasts an employee turnover rate of under 100%, a rate similar to fast casual and casual dining brands. Kelley shared that they experienced a significant decrease after the implementation of employee engagement surveys. (White Castle also was awarded the Black Box Intelligence (formerly TDn2K) Diamond Catalyst Award in January, a recognition of superior performance in workplace and marketplace. Read more about the award here)
- Voluntary turnover levels are going up: Turnover of both managers and employees industry wide is now at pre-recession levels. As concerning, 3 out of every 4 terminations are now voluntary. As employment pressures increase, in order to recruit and retain top talent, service sector workplaces, including restaurants will need to continue to innovate. Employers need to focus on strategies to engage and keep incumbent employees, as well as recruit top talent.
- Social Matters: There is a 2.3% positive comp sales difference for casual dining brands in units with higher social sentiment. In the example shared by the panel, an upscale casual dining chain experienced $0.50 higher per guest spending when achieving 75% positive Yelp mentions. It was also reported that markets with lower turnover have a higher percentage of positive service mentions. Happy team members = happy guests.
- Guest satisfaction is changing: The 24/7 always connected restaurant guest is changing the way (and the rate) restaurateurs can collect valuable information about their brand. In the same study mentioned above, White Box Intelligence reports, that restaurants receiving Yelp scores of three and above have an average of 1.2% positive comp sales while restaurants receiving 2.4 stars or below on Yelp, average negative 1.1%.