August offered more of the same on these three guest satisfaction attributes. Guest sentiment for food became less positive year over year last month. This trend started in April and reflects a deteriorating perception of restaurant food among consumers. But, there is some good news for the industry. Guest sentiment based on service became more positive during the month. This year, guests have expressed higher satisfaction with restaurant service than they did in the same period last year. TDn2K research has shown that guests reward good service. Top performing brands based on same-store sales growth tend to have much better service net sentiment* than the rest of the industry. However, even if service perception is improving, intent to return once again became less positive during August. This hints at challenging months ahead for sales and traffic. *Net sentiment reflects the number of positive mentions minus the number of negative mentions.
Online intent to return mentions are critical to measure. According to TDn2K research, they are the most accurate predictor of a brand's sales and traffic performance. Restaurant brands with the highest net sentiment for intent to return achieved same-store traffic growth of -2.6 percent during the second quarter of 2017. Brands with the lowest net sentiment for this attribute experienced traffic growth of -5.0 percent. Declining traffic has plagued the industry for years and remains its top challenge. Industry traffic growth during the second quarter of 2017 was -3.1 percent. In the past, we have highlighted the importance of service for restaurant sales performance. Now, in addition to service, value is also driving sales performance. During the first two quarters of 2017, value net sentiment for top-selling restaurant brands was 11 percentage points higher than the worst performing brands. As a comparison, this difference in value net sentiment was only six percentage points in 2016. Recently, restaurants have increased menu prices to offset rising labor costs and lost revenue. Meanwhile, grocery prices have been dropping year over year. In this environment, it makes sense that restaurant brands with better value see better results in the marketplace. This includes brands across all industry segments. So, regardless of price point and service style, consumers have an expectation of value. And, top performing brands tend to have a better value perception among its guests.
Restaurant guests in the Mountain Plains region remain pretty positive, as they have since the beginning of the year. However, during August this region fell to second place in the ranking of most positive restaurant sentiment. Guests in the New York/New Jersey region, who have been fairly negative recently, saw a jump in their positive sentiment during August. These guests in New York/New Jersey were not very positive about food or value. But, they were more positive than others when it came to service perception and the very important intent to return metric. On the other hand, guests in California have been reporting less positive restaurant experiences. Despite this, same-store sales growth in this region has trended among the best in the country in recent years. A bigger issue occurs in Texas and the Southwest. Not only have these regions been among the worst three regions for positive guest sentiment in the last two months, they also have a relatively low net sentiment and constantly rank among the worst regions in the country based on their same-store sales growth.
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.