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Kelli Valade, CEO and president of Black Box Intelligence, says restaurant sales are recovering from the pandemic, but the industry — like many others — faces labor shortages.

Restaurant sales recovery looks optimistic, says Black Box CEO Kelli Valade

In CREATE Digital Dive, data company executive provides insights into traffic, customer attitudes and workforce issues

As sales return to restaurants, operators are dealing with workforce shortages and demanding customers, says Kelli Valade, CEO and president of Black Box Intelligence.

“Looking ahead, we see optimism for faster sales recovery positive sales growth versus 2019,” said Valade, who heads the Dallas-based company that provides data and insights on workforce, guest, consumer and financial performance benchmarks for the hospitality industry.

Valade was the CREATE Digital Dive Keynote speaker Wednesday in a panel entitled “Metrics that Matter: Best-in-Class Performance Results in a Post-Pandemic World” with Sam Oches, editorial director and editor in chief for Nation’s Restaurant News and Restaurant Hospitality.

Black Box this week released new data that showed the restaurant industry achieved stronger sales for the second consecutive month in April than in the same period of 2019.

Black Box said same-store sales growth was 6.8% on a two-year basis in April, an improvement of 4.6 percentage points from the 2.3% two-year growth reported for March. That was the best month for restaurant sales growth in more three years, Black Box said, but it was mostly in check growth.

“Traffic has not recovered,” Valade said, adding later: “It will likely take longer for traffic to recover.”

Black Box has seen the breakfast and mid-afternoon dayparts start to show strength in sales again, while late-night continues to languish for now.

As restaurants expand capacity and reopen dining rooms amid easing of COVID-19 pandemic restrictions, many operators are discovering workers are difficult to recruit and retain.

Among limited-service restaurants, which were able to retain most employees through the pandemic restrictions, Black Box found reductions in staff between the average in 2019 and March 2021 was about 1.3 people among hourly workers and at par in managers. But in full-service restaurants for the same average-2019-and-March-2021 comparison period, Black Box found operators had reduced staff 9.2 people in the front of the house, cut 3.4 people in the back of the house and trimmed 0.2 among managers.

To address the tight labor market as they are rehiring, operators are finding the most successful tool to be referrals by current employees, Valade said.

“Remember leaning back into the ones that you have,” she said, “kind of ‘love the ones that you're with.’ … They are key to them recommending to a friend and key to keeping that flywheel turning on referrals, which again — since beginning of time — has been one of the best ways to find people.”

Black Box Intelligence recently polled restaurant operators on what recruiting sources for hourly employees provided were providing the best results. The result:

  • 49% said employee referrals.
  • 32% said company website or job boards.
  • 11% said social media.
  • 5% said walk-ins.
  • 3% said “other.”

And turnover remains high, she said, which makes some operators hesitant to offer referral bonuses, but those referral bonuses can be staggered.

“If retention the first six months is a challenge,” Valade suggested, “think about maybe pushing it out, giving an immediate referral bonus right away but pushing something out beyond six months.”

Diversis Capital Partners earlier this year acquired a majority stake in Black Box Intelligence. This week, Diversis and Black Box said they would acquire restaurant industry benchmarking firm MillerPulse LLC.

Black Box Intelligence currently tracks and analyzes nearly 300 brands, 2.4 million employees, 50,000 restaurant units and $76 billion in annual sales revenue.

Valade’s session was part of the May 19 CREATE Digital Dive, which was sponsored by Black Box Intelligence. Watch Valade’s full presentation on-demand here.

CREATE sponsors:

Founding sponsor: Johnsonville Foodservice

Gold sponsor: Texas Pete and The Coca-Cola Co.

Silver sponsor: Ecolab

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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