Restaurant sales lost some momentum during May, but continued showing some signs of relative strength when compared with the results for recent years, according to TDn2K's Black Box Intelligence. Year-over-year same store sales were flat during the month (the third consecutive month of positive or flat sales growth).
To provide some context around this sales recovery, year-to-date same-store sales growth by the end of May has been 0.3 percent. This is compared with -1.0 percent sales growth for each of the two previous years. While sales performance has improved, so has guest satisfaction with their restaurant experiences.
The online guest sentiment most closely correlated with same-store sales growth according to White Box Social Intelligence is guests' stated intent to return. And the positive sentiment for this metric has been soaring in recent months. May of 2018 posted a new record in terms of positive "intent to return" guest sentiment. The month saw the highest percentage of positive guest mentions for this guest sentiment attribute in the last three years. Additionally, May's intent to return recorded the highest year-over-year improvement in percentage of positive mentions during that same period. This very positive outlook from restaurant guests fuels optimism for continued improvement in restaurant sales throughout the rest of 2018.
A word of caution for chain restaurants comes in the form of declining positive guest sentiment based on service. Guests have continuously shown that one of the key components of their restaurant experience, and one they are willing to reward with their future business, is service. Restaurant operators should be focusing on those service scores as a way to extend the positive sales momentum and improve their traffic results.
Life in today's world centers around too much data and too many sources of information. The challenge for many becomes what to pay attention to. What is relevant?
TDn2K research has focused on establishing what top performance looks like in the restaurant industry and what are the key differentiators that drive top performance. During the first quarter of 2018, according to Black Box Intelligence data, the gap between top and bottom performers was almost 8.0 percent in annual same-store sales growth. (Top performers are those in the top quartile of sales growth performance, bottom performers are in the lowest quartile). Furthermore, the data shows that the gap in performance has been widening over the last couple of years. So the question becomes, what are those top performing brands doing differently?
White Box Social Intelligence insights show that one of the key areas of differentiation is ambiance. Regardless of whether the service style is full service or limited service, restaurant guests tend to rank top performing brands based on sales growth much higher when it comes to the ambiance attribute than those brands facing the worst declining sales.In some cases ambiance refers to components of the restaurant that are based on a capital expenditure and are therefore harder to improve on a short term basis. But frequently, it is the small details that make a huge difference. Things like restaurant (and restroom) cleanliness and a neat and properly cleaned table when the guest arrives can make a big impact on that ambiance score and drive incremental sales and traffic to a brand.
Is it important for restaurant operators to account for regional differences when trying to draw conclusions from their online guest reviews and comments? The answer is, absolutely. If there is something that the Restaurant Guest Satisfaction Snapshot has consistently revealed, it is that restaurant guests in the Mountain Plains region tend to rate their restaurant experiences more positively than guests in other regions of the country.
On the other end of the spectrum, it has also continuously shown that restaurant guests in New York-New Jersey tend to be a lot less positive when discussing their restaurant experiences online. In fact, this was the only region of the country in which less than 30 percent of all restaurant mentions were positive during May. Rounding up the list of most positive restaurant sentiment during the month were the Western region and California (the latter is tracked as its own independent region by TDn2K). Least positive regions also included the Southwest and New England.
The Restaurant Guest Satisfaction Snapshot is produced by White Box Social Intelligence™, a TDn2K company™. WBSI 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 White Box Social 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.