Restaurant sales positive in May despite slower growth

Overall, May 2022 was a good month for restaurant sales. The expected slowdown in sales growth continued thanks to last year’s sales numbers – which were impacted by COVID-19 vaccines and reduced restrictions imposed by the pandemic. Both unleashed pent-up demand in the market, which created tough sales hurdles today. On a monthly basis, sales growth numbers have held steady, remaining at levels that would have been considered strong in the pre-COVID era.

Sales growth was +4.9% in May, down only slightly from +5.3% announced for April. These strong sales numbers are due to the growth of guest screening at an accelerating pace. The biggest concern is traffic, which posted the third consecutive month of negative growth. Traffic growth was -2.9% during the month, down slightly from -2.8% in April. But even these negative traffic growth numbers are not far from what was happening at the end of 2019. The months in the fourth quarter of 2019 recorded an average traffic growth of -2.0%.

Although maintaining guest numbers is currently a challenge, the data suggests that it may be due to factors beyond the restaurant’s control. Reports indicate that guests are more positive about their restaurant experiences than they were a year ago. At the same time, the operators seem to keep their promise of a good restaurant experience, especially when it comes to service.

According to online reviews, guest morale* toward restaurant service improved by about six percentage points year-over-year in May. Moreover, net positive service sentiment increased since the beginning of the year compared to 2021 – with May marking the third highest service sentiment since January 2021.

Net food sentiment remained almost flat year-on-year in May. Last year also recorded strong sentiment towards food. May 2022 recorded the second highest net food sentiment score in the last 17 months.

*Net sentiment represents the percentage of positive mentions minus the percentage of negative mentions in online restaurant reviews.

Financial metrics are “same store” metrics and are reported in a one-year comparison unless otherwise noted

Ratings are much lower for orders outside the company’s headquarters in full service, and the difference is less significant on limited service

When it comes to restaurant review data, one thing is very clear, albeit not unexpected: Guests tend to rate their restaurant experiences as more positively when dining in the restaurant than when they eat or drink outside the premises. Surprisingly, how little difference in ratings between these two channels is in the case of limited-service restaurants.

For full-service restaurant brands, the average star rating (based on a five-star scale) during the second quarter of 2022 was 4.0 when it comes to dining experience. While the average rating fell to 2.8 when referring to outdoor premises. This is a significant 1.2 pips drop between the two channels.

The main drivers behind low domestic ratings for full-service brands are usually related to either longer wait times and problems with orders. There was a higher percentage of negative mentions of time-related issues (‘wait’, ‘minutes’, and ‘long’) in assessments outside the workplace than those related to eating. There was also a higher rate of cues based on a specific ordering issue – things like ‘cold’, ‘wrong’ and ‘forget’, as well as fewer mentions that food was ‘delicious’ in take out.

In the case of limited-service restaurants, the average overall star rating was low, and the difference between the two was negligible. The average limited service dining experience resulted in an average star rating of 2.8, compared to 2.4 for orders to be consumed outside – a drop of just 0.4 points. Limited service sees a dominant share of the business through channels outside the premises. As a result, they are usually able to implement more consistently despite the challenges they face outside of the workplace. But this month’s low overall rating indicates that there are still challenges – and something all brands should watch out for as an opportunity for improvement.

In the case of limited-service restaurants, the biggest driver of the drop in the off-site rating for dining was wait time for orders, with the word “waiting” mentioned 1.4 times more in external ratings than in those reviews for dinner orders.

Region and market performance

There is no doubt that Florida dominated during the month of May on the basis of metropolitan areas with net positive feelings in restaurants. The particular market area with strong sentiment based on service, drinks, ambiance, and intent to return was Tampa, while Orlando was the most positive area for restaurant food and value.

Besides Orlando and Tampa, which topped the list of net-food positive sentiments, Philadelphia were the other major markets where restaurants scored strong positive sentiment based on their food. Raleigh, NC; Indianapolis and Miami. The same DMAs led the country to net service sentiment during the month.

On the other end of the spectrum, guests are less positive about their restaurant experiences in San Francisco. During May, San Francisco had the slightest feelings for the restaurant’s food, service, value and intent to return.

The Restaurant Guest Satisfaction Snapshot™ (RGSS) is produced by data from Black Box Guest Intelligence™. Guest Intelligence measures customer satisfaction data from over 190 brands and is the only online tool that integrates with operational performance data to check the impact on financial performance. The dataset focuses on six key attributes of the restaurant industry experience: food, service, ambiance, drinks, value and intent to return.

The RGSS algorithm identifies top-ranked brands based on sentiment. Brands included in this monthly snapshot should have at least 250 mentions for the month. Restaurants must have a minimum number of units to be eligible as well. DMA ratings only consider the 25 largest regions.

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