Restaurant sales stumbled again during April, when same-store sales declined for the second time in the last three months. Same-store sales growth was -0.4 percent according to TDn2K's Black Box Intelligence™.
This could spark concerns that the long period of restaurant sales expansion we have been experiencing may be coming to an end, but it simply is too early to push the panic button. Positive momentum remains from a two-year sales growth perspective. Additionally, Easter shifted to April this year while being celebrated in March last year (Black Box Intelligence tracks weeks Monday through Sunday, which pushed April 1 to March in 2018). This hurt restaurant sales and made April's growth appear softer than it would have otherwise.
This cautious optimism is supported by leading indicators such as guest sentiment, which continues improving year over year according to White Box Social Intelligence™.
Restaurant guests rated their restaurant experiences more positively based on food, service and intent to return during April compared with the same month a year ago. In restaurants tracked by White Box Social Intelligence, over 50 percent of online mentions related to service were classified as positive, bringing encouragement to the restaurant industry. Superior service is continuously found to be a key differentiator for top performing brands in the industry. Brands that provide exceptional service are often rewarded with incremental sales and traffic.
The restaurant industry has been performing better in recent quarters, and positive same-store sales growth is back to being the norm for the last year, but there are wide ranges in performance by brand.
During the first quarter of 2019, restaurant companies in the top quartile of same-store sales growth experienced growth rates almost 8.0 percentage points better than those in the bottom quartile. Needless to say, those are two starkly different sets of results. At the top, there are brands thriving and able to increase their guests counts year over year. These brands usually have the power to push their price increases a bit more due to the superior experience they are providing. Those at the bottom of sales performance are struggling with rapid decline in guests and rapidly falling sales year over year.
But is this great divide in performance captured through what the guests of these brands are saying online? Do they really mean it when they post a review to rave about a brand or to say they are never returning? White Box Social Intelligence analytics show there is a tie between stated intent to return and results in the marketplace.
During the first quarter, those same top performing restaurant brands had guest sentiment around intent to return 10 percentage points more positive than those brands with the worst sales growth.
The entire region of Florida continues to dominate in restaurant guest sentiment in addition to having some of the most positive markets. The Western region has also consistently climbed to the top in terms of most positive restaurant sentiment. During April, these two regions had over 60 percent of all their restaurant mentions and reviews classified as conveying a positive sentiment.
These two regions were also the only ones in the country that achieved better than -3.0 percent same-store traffic results during April.
The regions with the least positive restaurant sentiment during April didn't offer any surprises. New England and New York-New Jersey are constantly proving their guests tend to be less positive about their restaurant experiences.
Interestingly, the three regions with the least positive guest sentiment during March are also the three regions with the worst same-store traffic results in April: New York-New Jersey, New England and the Southwest.
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.