November brought good news to restaurants from a sales growth perspective. According to TDn2K's Black Box Intelligence, same-store sales growth was 1.0 percent during November, which became the sixth consecutive month of positive sales growth. The industry had not experienced a sustained period of sales expansion this long in over three years.
Guests are spending more on chain restaurants than they did a year ago. Is this increase due to guests responding positively to restaurants delivering a superior experience? Data from TDn2K's White Box Social Intelligence™ suggests that indeed, restaurant guest satisfaction has been improving steadily this year.
Intent to return is a closely monitored metric, as White Box data has found it to be particularly predictive of restaurant brand performance. The percentage of intent to return mentions that reflected a positive sentiment during the last three months improved by almost five percentage points over the same period in 2017, and a robust 13 percentage point increase when compared with those same months in 2016. Guests are expressing they are increasingly willing to return to and recommend chain restaurant brands as well as spend more money at them.
Since last year, service has emerged as an attribute of the restaurant experience where top performing brands excel. Overall, guests have also been expressing they are more satisfied with chain restaurant service this year. Compared with the same period in 2017, online mentions of service became 2.5 percentage points more positive on average during the last three months.
Even if restaurants have consistently posted positive same-store sales growth during the last six months, this has been achieved only through growth in average guest check. The industry continues losing dining occasions as guests spread their food-away-from-home dollars among more players in the food service space. Despite posting positive sales growth, same-store traffic growth during the third quarter of 2018 was -1.2 percent.
However, even though most brands in the industry are experiencing similar results and seeing their guest counts erode, those brands in the top quartile of performance (those among the 25 percent of brands tracked by Black Box Intelligence™ with the highest same-store sales growth) are achieving quite remarkable results when it comes to guest counts. These top performing brands were able to achieve positive same-store traffic growth on average during the quarter. Compared with those in the lowest quartile of sales performance, their traffic results were an outstanding 8.4 percentage points better.
What can we learn from these top performing brands that are able to grow their guest counts? White Box Social Intelligence data shows these brands get much higher guest sentiment scores when measured on ambiance. In fact, their net sentiment score* for this attribute was about 25 percentage points higher than for those brands that are struggling the most with their sales. Ambiance along with service have risen to the top as the two attributes that create the biggest differentiation between top and bottom performing brands based on sales growth. The message from guests seems to be: there are plenty of places from which to buy food from, but restaurants need to go above and beyond on the whole experience.
*Net sentiment score = percent of positive mentions – percent of negative mentions
Not only is the restaurant industry doing better regarding sales growth and guest sentiment at the national level, there are also encouraging results at the regional level. For the first time in TDn2K's Restaurant Guest Satisfaction Snapshot, more than half of all online mentions of restaurant brands were positive in all eleven regions of the country.
In the past, the elevated guest satisfaction recorded for the major markets in Florida did not necessarily translate to the overall region. During November of 2018, Florida topped the list as the region* with the highest restaurant guest sentiment.
The Western region and Mountain Plains round out the top three based on positive guest sentiment. The latter has consistently proven to be home of the most positive guests in the country. This region is typically found at the top of the guest satisfaction list.
Which regions saw chain restaurants facing the biggest challenges to meet their guests' expectations? Regions with lowest positive sentiment were California, New England and New York-New Jersey. The latter has proven to be a tough region to operate. Guests in New York and New Jersey are typically found on the list for least satisfied with their chain restaurant experiences.
*Due to its size, Florida is considered one of the regions of the country in TDn2K reports. California and Texas are also classified as regions.
The Restaurant Guest Satisfaction Snapshot is produced by White Box Social Intelligence™, a TDn2K Product™. 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.