Sales growth, guest sentiment related to speed of service soften
Staffing shortages may be rearing their head this fall, as the restaurant industry experiences softer growth than in the fall. New data from Black Box Intelligence suggest that there may be a correlation between staffing issues and sales degradation and service-level declines. October’s increase from last year came in at 6%, softer than September, which posted a 6.3% increase. Moreover, October is more than two percentage-points from the sales peak in July, which was up 8.2% over last year.
Black Box notes that average checks are significantly up and that these numbers may be hiding sales performance softness (with traffic down). Traffic growth certainly took a downturn since March, with restaurants posting in October a 6.4% decrease from last year.
The data also show that negative online reviews have grown. In October, the share of service comments that were classified as positive decreased by 1.1% year over year. The three-month trailing average has also dropped by 1%. What’s more, October came in with the smallest percentage of positive ‘service’ mentions since the beginning of 2021.
Food sentiment, however, was up 0.4% from last year in October with the three-month average staying flat.
Service is the achilles heel of the restaurant industry, currently. Service guest sentiment has been on a year-over-year downward trend since the second quarter. One contributing factor may be turnover. In the limited-service segment, hourly turnover increased by over 20 percentage points from last year in Q3. In full-service, hourly turnover rose by 15 percentage points.
Restaurant customers have noticed issues in the speed of service they are receiving when visiting restaurants, with LSR having the most problems. Net sentiment specific to speed of service was down 13% in Q3 from last year. Speed of ‘service’ sentiment was down even more, dropping 16% compared to just before the pandemic (Q1 2020).
FSRs are also experiencing speed of service issues. Although not as precipitous a drop as in LSR, guest sentiment based on speed of ‘service’ also declined in FSR: Net sentiment fell by just 3% year over year in Q3 and net sentiment for speed of ‘service’ was flat compared with Q1 of 2020.
In addition, its net sentiment value pre-COVID (Q1 2020) was 3.5 times smaller than the speed of service net sentiment among limited-service brands. Black Box Intelligence posits, based on the data, that speed is not as strong a driver in full-service, or perhaps that speed was already a problem for these brands preceding the challenges brought by COVID.
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