Despite bad weather affecting large areas of the country and the negative effects on spending from the federal government shutdown, chain restaurants were able to post an impressive 2.0 percent same-store sales growth during January according to TDn2K's Black Box Intelligence™. To be fair, the industry was assisted by a favorable shift in New Year's Eve (which fell on the first week of 2019) and soft sales in the comparable month of January 2018. Nonetheless, the industry is now experiencing some same-store sales growth on a two-year basis, suggesting the relative strength of the industry is solid.
In recent months, the TDn2K Restaurant Guest Satisfaction Snapshot has shown that not surprisingly, as restaurant sales have been improving over the last year, guest sentiment has also become more positive. The first month of the new year was no exception to this trend. Guest comments and online reviews became more positive year over year regarding the food and service they received from restaurants during January of 2019.
If there is one component of the restaurant experience that has consistently differentiated top performing brands based on same-store sales growth, it has been service. This insight is good news for chain restaurants today. Out of the five operational attributes of the restaurant experience (food, beverage, service, ambiance and value), the one with the most positive sentiment in January was service. Furthermore, it was the only attribute where over 50 percent of all online mentions and reviews were positive.
There may be improvement in the overall sales growth results for the industry, but the gap between top-performing brands and the ones at the bottom is large and has been widening in recent quarters. TDn2K research has continuously found that the brands with the best same-store sales results also show significantly better management retention.
During the fourth quarter of 2018, those restaurant brands in the top quartile of same-store sales as tracked by Black Box Intelligence on average had restaurant manager turnover 14.2 percentage points lower than those brands in the bottom quartile of sales performance.
Furthermore, the attributes in which these top-performing brands drove the biggest gaps in guest sentiment compared with underperformers were intent to return, service and ambiance. Over the last few quarters these attributes have proven to be key to restaurant success. Given that the restaurant business is a people-driven business at its core, it is not surprising to find that according to White Box Social Intelligence™ metrics, those companies that excel at the people side of their operation are also those that are getting the best guest sentiment scores and financial results.
In the case of service, the connection is more obvious and direct: tenured, fully trained and engaged managers are likely going to lead to better sales results. But in the case of ambiance sentiment, the people tie-in may not be as evident on the surface. However, the data shows that a considerable portion of ambiance guest sentiment is based on aspects of the restaurant's operation that are directly in the hands of the employees, such as cleanliness of the restaurant or appearance of the table as the guest sits down.
The improving restaurant guest sentiment has been widespread from a geographic standpoint, as evidenced by White Box Social Intelligence's regional results. For the third consecutive month, all eleven regions of the country had over 50 percent of their online mentions classified as positive.
Traditionally, it has been guests in the Mountain Plains region who have taken the prize as the most positive in the country when it comes to rating their restaurant experiences. Sentiment was positive in Mountain Plains again in January. Nevertheless, this month two other regions emerged as having the most positive restaurant guests in the country: Florida and the Western region. Over 60 percent of all restaurant mentions were positive in each of these three regions during the month.
The region with the least positive restaurant sentiment in January was New England. Even there, almost 56 percent of all mentions were classified as positive. Regardless of region, restaurants seem to have been successful in driving positive sentiment among their guests during the month, which bodes well for an industry that has continuously struggled with declining guest counts.
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.