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The restaurant industry’s sales stumbled again in November.

Black Box Intelligence: Restaurant sales, traffic stumble again in November amid COVID spikes and colder weather

Guest sentiment offers insight into best-performing menu items

The restaurant industry’s sales stumbled again in November as the number of COVID cases rose rapidly and colder weather started to become an obstacle for outdoor dining in many areas of the country. Same-store sales growth was -10.3%, which represented a 3.8 percentage-point drop from October’s year-over-year sales growth rate. November’s -16.3% same-store traffic fell by 3.3 percentage points compared to the previous month’s performance. This was the worst month for the industry since August based on year-over-year losses in sales and traffic.

But perhaps the most concerning insight from the latest data is that restaurant sales worsened throughout the month. Additionally, by the last week of November, same-store sales growth was the worst experienced by the industry in almost four months, signaling that we may be in the middle of a new restaurant downturn.

But there is some good news for the industry coming from the latest data insights uncovered by Black Box Intelligence™. Although sales were not good during the month, guests indicated they were increasingly satisfied with their restaurant experiences. Guests have rallied behind restaurants and have been forgiving despite many of the challenges faced by the industry.

During November, the percentage of restaurant-food online mentions and reviews that was classified as positive grew by 7.0 percentage points compared to the same month in 2019. Service-related mentions became more positive by 6.0 percentage points year-over-year. The crucial intent-to-return metric also became more positive during November, an encouraging sign showcasing restaurants’ efforts in driving guest satisfaction in the middle of the pandemic. Furthermore, intent-to-return scores are almost at the levels they were immediately before the virus outbreak in March.

Connecting the dots

Considering that restaurant-food sentiment is improving among guests, an opportunity is presented to explore their favorite menu items. What foods are they mentioning most often and assigning a positive sentiment? As would be expected, the answer varied widely between different kinds of restaurants.

In the case of limited-service restaurants, the menu item most frequently mentioned when describing a positive food experience in November was by far pizza. The second most mentioned menu items were burgers, followed by chicken (which included chicken sandwiches). This is welcome validation for those restaurants that are having great success selling those items. According to the financial data tracked by Black Box Intelligence, the three restaurant cuisine types that have been outperforming the rest throughout the pandemic are precisely pizza, burgers and chicken. As the rest of the industry struggles, those restaurants specializing in those food items are experiencing strong positive same-store sales growth on average. But overlying this guest-sentiment data reveals that while these menu items benefit from being typically associated with limited-service restaurants (which are doing better overall) and the fact that they are well-suited for off-premise sales environment, success is also coming from great execution. Guests are mentioning these menu items the most and when they do, they overwhelmingly describe a positive experience.

For full-service restaurants, the menu item that got the largest number of positive guest mentions during November was steak. And it is relevant to mention that this is not driven by fine dining or even upscale casual. Steak was the most mentioned menu item in casual dining when describing a positive food experience.

The other menu items most commonly mentioned with a positive sentiment during November were wings, followed by salad.

Top designated market areas

There is a sense of normalcy that has returned to restaurant guest sentiment at the local level. Specifically, Orlando, Fla. topped the list of major markets with the most positive restaurant sentiment, as was the norm before the pandemic. During November, Orlando’s restaurant guests had the most positive sentiment when rating their experiences with the key indicators of food and service.

What is interesting to highlight is the shifts that have occurred in the list of major markets with the most positive restaurant ambiance sentiment. This attribute of the restaurant experience has become increasingly important this year since it includes the highly relevant cleanliness component. In recent months it has been highlighted how much ambiance sentiment boosts are being driven by improvements in cleanliness sentiment.

The markets with the highest ambiance sentiment during November were Los Angeles, Phoenix, Orlando, Minneapolis and Washington, D.C. Except for Los Angeles, none of these other major markets cracked the top 5 last month. As the number of COVID cases rises, guests may have become more concerned with ambiance and cleanliness. Restaurants in these cities seem to be responding to the challenge and better meeting guest heightened expectations.

The Restaurant Guest Satisfaction Snapshot is produced by data from Guest Intelligence™, a Black Box Intelligence Product™. Guest Intelligence is tracking over 190 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 Black Box Guest 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.

Black Box Intelligence™ (formerly TDn2K) is the leading data and insights provider of workforce, guest, consumer and financial performance benchmarks for the hospitality industry. The Black Box Intelligence product suite is the industry standard for operators seeking to achieve best-in-class performance results. With the largest and most reliable set of real restaurant data in the marketplace, Black Box Intelligence currently tracks and analyzes more than 290 brands, 2.5 million employees, 50,000 restaurant units and $76 billion in annual sales revenue. Black Box Intelligence is also the producer of the Global Best Practices Conference held annually in Dallas, Texas.

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