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Black Box Posting Best Month Since March 2022
High Prices, Large Check Growth Fuels Increase in Sales Despite Declines in Traffic
Restaurant same-store sales growth was +5.3% for August, the strongest same-store sales growth since March and a significant increase of 4.6 percentage points over July 2022’s growth rate. Black Box Intelligence has been reporting a consistent decline in same-store sales growth, culminating in July with sales only growing by +0.7% – the lowest in over a year. To further put this month’s rebound into context, March 2022 posted more robust year-over-year sales and traffic growth numbers because the industry was still lapping over months impacted by the pandemic. Same-store traffic growth for the restaurant industry was -1.9% in August. Although this represents a substantial 3.2% rebound from July’s numbers, the fact remains that it is the sixth consecutive month of year-over-year declines in guest count. August’s upturn in sales was widespread throughout the industry, with all segments experiencing an improvement in year-over-year same-store sales growth. Reporting the most significant acceleration in sales were the Full-Service segments. The segment with the largest growth was Fine-Dining, followed by Upscale Casual, and then Casual Dining.
Off-Premise is playing a bigger role, But Reviews Paint A Complex Picture.
Black Box Guest Intelligence data confirms that customers now opt for off-premise options, including take-out and delivery, more now than before the pandemic. Even though customers prefer the off-premise dining option more often, they aren’t necessarily satisfied. 2Q22 net sentiment for off-premise dining was negative across all segments. Of the guests who described their off-premise experiences during the quarter, a more significant percentage of reviews expressed a negative sentiment. Full-Service segments received a -12% net sentiment score, while Limited-Service segments scored -33%. When comparing in-store against off-prem performance for Full-Service, the net sentiment was 64 points higher than its off-premises score.
What accounts for the stark disparity between on-and-off-premise dining sentiment - food. Guests mentioned “food” as often for both on-and-off-premise channels. Yet, the dip in average star rating is substantial. Among reviews for Full-Service restaurants, on-premise food has a rating of 4.0. The off-premise dining channel received a 2.9 rating. “Cold” was a frequently mentioned term and a significant clue to the factors eroding off-premise sentiment. Black Box Guest Intelligence found “cold” in 8% percent of mentions for Full-Service off-premise business. The mention of “cold” in reviews of off-premise orders resulted in a drop in average star ratings.
Restaurants Still Contend With Staffing Issues
The Black Box data shows that restaurants are still operating at lower staffing levels than in 2019 before the pandemic. As of July, the typical restaurant within a Limited-Service chain was, on average, operated with one fewer non-management employee compared to the norm in 2019. There is some seasonality associated with these staffing levels, but the gap has generally remained relatively constant in recent months. In the case of Full-Service restaurants, the gap was even more expansive. On average, each restaurant was operated by four fewer front-of-house, non-management employees. Meanwhile, the gap among back-of-house staff remains a little over one employee on average.
