February seems to have been an anomaly for restaurant sales. Same-store sales growth fell into negative territory for the first time since May, as same-store traffic growth plummeted for the industry. Extremely bad weather in large regions of the country seems to have been the primary reason behind this fall. According to TDn2K's Black Box Intelligence™, restaurant same-store sales growth was -0.6 percent during February, while traffic growth was a weak -3.7 percent.
Guest sentiment trends remain unchanged from recent months based on White Box Social Intelligence™ data, giving a reason for restaurant operators to remain optimistic that the latest month's results could not be the beginning of a new industry downturn.
As has been reported lately, guest sentiment has become more positive regarding experiences with chain restaurant food and service. In the case of service, the increase year over year may not seem large, but the fact that guests are increasingly satisfied on this key component of the restaurant experience is significant. In recent years, service has been found to be one of the most important attributes of the restaurant experience when it comes to driving incremental sales and traffic (much more than food). Furthermore, over 50 percent of all online mentions related to service have been positive for the last three months.
February's slowdown notwithstanding, sales performance of chain restaurants has been improving dramatically over the last year. Not all brands are sharing the same on this sales turnaround, however. Black Box Intelligence data has revealed that sales growth between the top performing brands and those at the bottom has tended to widen in recent quarters.
During the fourth quarter of 2018, limited service brands with the top performance based on same-store sales growth (25 percent of quick service and fast casual brands with the highest sales growth rate), outperformed those in the lowest 25 percent of sales performance by a huge margin of 10.4 percentage points in their same-store sales.
The data from White Box Social Intelligence has revealed that ambiance is one of the primary ways that top performing brands are differentiating themselves and delivering on a superior restaurant experience to their guests. Net sentiment based on ambiance for those same top performing brands was almost 14 points higher than for those brands underperforming.
Once guests decide they are spending their time and money on dining at a restaurant, or even picking up some food to go, they have a clear expectation of what the restaurant should look and feel like. Even when it may be a faster interaction at a lower price point, like those typically at limited service brands.
But even if ambiance may sound like an attribute that requires a big investment in time and money to improve, TDn2K research has found that typically it is the people side of the business who can greatly influence the ambiance perspective. Issues around ambiance are frequently related to cleanliness and appearance that is part of the day-to-day restaurant operation.
From a regional standpoint, improved guest sentiment is widespread, yet another positive sign encouraging continued optimism in the restaurant industry's future sales performance. Even if February brought declining same-store sales year over year, it also became the fourth consecutive month in which all eleven regions of the country saw over half of their online restaurant mentions classified as positive.
Three of the country's regions had over 60 percent net sentiment during the month: Florida, the Western region and Mountain Plains. The latter being among the regions with the most satisfied guests is nothing new; this has been a constant since the beginning of the Restaurant Guest Satisfaction Snapshot in 2017.
Although finding New York-New Jersey and New England at the bottom of the list for regional restaurant guest sentiment is common, there is a silver lining that net sentiment there has been rising. Guests there may not be satisfied as easily from their restaurant experiences, but from a relative standpoint perception of recent restaurant visits has been improving.
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.