Wallace Doolin, chairman of Thomas Doolin and Associates LLC.
Editor's note: This exclusive series to Nation’s Restaurant News provides C-level insights into the sales and traffic data from clients subscribing to Black Box Intelligence, a financial performance benchmarking company. The views expressed here do not necessarily reflect those of Nation’s Restaurant News.
The stock market is up on average and the Black Box Intelligence Index for same-store sales is up for the second month on average. I can’t say the same about same-store traffic as we report our 18th consecutive negative quarter. But, up is up, and “on average,” it feels good to report.
With that said, I want to depart from our comfort zone for a moment to discuss variability and top quartile performance as a way to manage results so that they exceed average. In every company, every market and every segment there is a variability of performance from best to worst, yet one seldom hears it discussed.
We generally discuss most results relative to the average, even though the actual performance spans a pretty wide spectrum of results. To me, it begs the question, "Will average be good enough to win if we don’t explore top quartile and overall variability in the results?"
Let’s look at some examples in our April data.
|Black Box Intelligence (reporting on over 100 brands)|
|Metric||Top quartile||Bottom quartile||Gap|
|Turnover gap in top to bottom quartiles|
|Hour turnover||Management turnover|
| Note: Turnover numbers from trailing 12 months. |
We are talking about real money here. As I said, in every system there are the top performers that can achieve results that their counterparts in the same concept and market cannot. Why is that?
I will give you one more set of data on a company we reviewed to understand some of the performance correlations that made a difference. We looked at the company's best five markets and worst five markets in their Black Box Intelligence data first.
|Sales and traffic gap between the best and worst markets|
Then we looked at the company's People Report data. What did we find? In those same 10 markets we found a gap of 61 points difference in management turnover from the best five versus the worst five markets. In hourly turnover it was less pronounced, with a 20-point gap.
Now, you might say it's obvious that higher turnover hurts sales and profits. But think about it this way: Attracting, hiring, training and retaining the right management talent in those top five markets has delivered top-quartile same-store sales performance in the marketplace for their stores, as well as an additional 13.5-percent increase in same-store sales over their own peers, while reducing management turnover costs by as much as two-thirds.
It's always good to know that great management counts.
Now, that is a possibility in the variability. I hope you have a great May.
Wallace B. Doolin
Doolin is Chairman of Thomas Doolin and Associates LLC, the holding company of People Report, the leader in human capital business intelligence for the restaurant industry and Black Box Intelligence. He is the Founder of Black Box Intelligence, a state of the art business intelligence software product also for the restaurant industry. Additionally, he serves as a Trustee Emeritus of the National Restaurant Association and National Restaurant Association's Education Foundation where he is a past Chairman. Other current responsibilities include serving as a Board Director for Famous Dave’s a public company, SplickIt a mobile technology company, Phase Next Hospitality a non-traditional operator/franchisee and Share Our Strength a leading nonprofit. Previously, Doolin served as CEO of Carlson Restaurants Worldwide, T.G.I. Friday’s, Buca Inc. and La Madeleine, as well as president of Applebee’s. He is a frequent speaker and writer on the global restaurant industry.
The Restaurant Industry Snapshot is a compilation of real sales and traffic results from 170+ DMAs from 100+ restaurant brands and approximately 15,000+ restaurants that are clients of Black Box Intelligence. Currently, data is reported in four distinct segments: casual dining, upscale/fine-dining, fast casual, and family dining. Black Box Intelligence is a sister company to People Report, which tracks one million restaurant employees on workforce analytics. The Restaurant Industry Snapshot also includes the Restaurant Industry Willingness to Spend Index from Consumer Edge Research, which is a monthly household survey of more than 2,500 consumers. Consumer Edge Insights is a marketing partner with Black Box Intelligence and People Report