Chain restaurant same-store sales rebounded the last couple of months. Fourth quarter results improved from the first three quarters of the year. Furthermore, it could become the first with positive same-store sales growth in the last two years. Restaurant guests expressed online during November that they were less satisfied with their food than they were a year ago. This trend has persisted throughout this year. However, guest satisfaction based on service continues to improve. This is likely the reason why restaurant sales growth and traffic have improved in recent months. And this improvement is accelerating. On average, over the last three months, guest sentiment based on service has improved by 0.9 percentage points year over year. However, for November, the improvement jumped to 5.4 percentage points. TDn2K research has shown that service is a critical component of the restaurant experience. Fortunately, guests typically reward good service with higher sales growth. A cautionary note, though, comes in the form of declining intent to return sentiment during November. Restaurant guests that expressed positive sentiment for intent to return dropped by 6.5 percentage points, compared with November of 2016.
This year, particularly the third quarter, has been very tough for chain restaurants. All industry segments experienced negative sales growth during the third quarter, a first in more than three years. However, for table service brands, (those classified as family dining, casual dining, upscale casual, or fine dining), there are brands that are being very successful at growing their sales. In Q3, those brands among the top 25 percent of table service restaurants based on same-store sales performance had same-store traffic growth 11.6 percentage points better than brands in the bottom 25 percent. This shows how wide that traffic gap is between top and bottom performers. Brands with solid execution have been able to solve the falling guest count challenge the industry has been facing since the recession. But what can we learn about those brands from the guest perspective? One of the key findings that emerged was that even though value is typically more associated with counter service brands, guest perception of value is still a key element for table service concepts. In fact, those brands that were classified among the top performers based on sales growth had an average net sentiment score for value that was 7.2 percentage points higher than those brands at the bottom of sales performance. Service, ambiance, food and beverages are all important for brands competing in those segments. But top performers differentiate themselves by better satisfying their customers from a value perspective. Be it a $10 meal at a casual dining restaurant or $100 at a fine dining place, guests want to feel like they got their money's worth.
If there is one thing that the Restaurant Guest Satisfaction Snapshot has shown consistently, it is that restaurant guests in the Mountain Plains region are the most positive about their restaurant experiences. During November, this region again topped the list based on percentage of positive restaurant mentions during the month. Restaurateurs operating in Colorado, Kansas, Missouri, Montana, Utah and Wyoming tend to get higher percentages of positive online mentions from their guests there than in the rest of their restaurants throughout the country. Also among the most positive regions were Texas and the Western region. This is welcome news for Texas, which recently saw a sharp decline in its percentage of positive mentions. Texas was also the region with the highest same-store sales growth during November. This is a sign that the state is emerging from its hurricane recovery period much stronger than before. It has achieved two consecutive months of positive sales growth after being negative the rest of the year. As sales have improved, so has guest net sentiment in November.
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.