Editor's note: This new and 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 Restaurant Industry Snapshot” for the month of April is reporting that actual restaurant sales and guest traffic in 115 DMAs, or designated market areas, has improved versus March, but still remains slow compared to the previous six months.
This information is consistent with the “Restaurant Willingness to Spend Index” from our partner Consumer Edge Research. That index remained flat in April, compared with March, and was lower than the preceding 3 months when the industry seemed to be rebounding with encouraging positive comparable sales and improving traffic. Industry employment through March, as measured through our sister company, People Report, and its “Human Capital Index,” shows job creation continues and management retention is positive, but there is a slight increase in employee turnover.
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Putting that all together, we believe the consumer is spending in other areas with pent-up demand, as seen in March and April’s increase in new car sales and new privately owned housing permits. Consumers also remain concerned about gas prices, unemployment and overall economic uncertainty.
With all that said, the real story is in the local and regional information where we see pockets of real growth or decline based on short-term weather and longer-term fundaments like employment and housing starts. There is great variability in regions, segments and brands. It seems the Northeast continues to suffer as a region and yet California seems to be coming back.
I’m reminded of a game of chess that can be slow or quick depending on the response to the other player. In this case we are trying to anticipate the consumer’s response to a myriad of macro stimuli continually moving through technology that is available 24 hours a day. If the consumer shows signs of slowing we may respond with a greater value promotion, but if consumer sentiment signals more confidence we may respond with offerings that strengthen our overall core value proposition and our bottom lines. Many companies have their business back on track and seem to make the adjustments necessary to outperform others in this new fast-moving environment.
I believe the real bottom line is that the top performance companies know their business and break it down to the pieces rather than the whole. We see sales of to-go, catering and alcohol beverages moving up in the BBI index, but not at all companies. It is the careful attention to the individual competitive pieces that add up to great performance as a whole.
We, like our member operators remain optimistic, not for a hockey stick recovery, but a gradual slope of improvement that is well thought out and consistently executed better than the competitors.
• Restaurant sales and traffic drop in March
• Gas prices hurt restaurant sales, traffic in February
“The Restaurant Industry Snapshot” is a compilation of real sales and traffic results from 117 DMAs from 73 distinct restaurant brands and approximately 12,000 restaurants that are clients of Black Box Intelligence. Currently, data is comprised of casual dining (44%), upscale/fine-dining (32%) and fast-casual/family-dining (24%). Black Box Intelligence is a sister company to People Report, which tracks 1 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 Research is a marketing partner with Black Box Intelligence and People Report.
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 product for the restaurant industry. Additionally, Doolin serves as executive chairman of ESP Systems LLC, a hospitality and healthcare technology company. Other current responsibilities include public company board of director service for Caribou Coffee and Famous Dave’s. Previously, Doolin served as CEO of Carlson Restaurants Worldwide and TGI Friday’s.