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Black Box Intelligence: December 2020 Restaurant Sales Were the Lowest Since July

The fourth quarter of 2020 was bad for restaurant sales, with December being “the worst month” since July, according to the latest data from Black Box Intelligence, which shared the information in its monthly Nation’s Restaurant News update.

By December, same-store sales growth fell to -13.3 percent year over year, while same-store traffic growth clocked in at -18.6 percent. In comparison, same-store sales in November were at -10.3 percent and same-store traffic growth at -16.3 percent.

Black Box noted that multiple factors contributed to poor sales numbers for restaurants in November and December. Those included a hike in COVID-19 cases and new dining room restrictions as a result of those rising case numbers. It being wintertime, colder weather limited or eradicated outdoor dining options in many parts of the country, further contributing to lagging sales numbers.

Despite the poor sales numbers, Black Box suggests that restaurants “were successful” in raising guest sentiment for their brands in December. 

Ambience, which in this case relates a lot to cleanliness and transparency around safety procedures, saw the largest improvement in terms of guest sentiment: “Meeting or exceeding [guests] expectations for safety is rewarded with positive feedback online.” 

Somewhat tricker is sentiment around the actual food. Food sentiment “dropped considerably” from November to December. This occurred simultaneously alongside a rise in off-premises orders and a slowdown in dining room sales due to the aforementioned restrictions. As Black Box states in this latest report, sentiment around food has “always been significantly lower” than food in the dining room. 

Restaurants have grappled with the challenge of maintaining quality food in a takeout environment since the pandemic first shut down dining rooms nearly a year ago. Tactics for better to-go food include things like paring down menus to the basics and completely redesigning menus to feature delivery-friendly fare.

Off-premises orders are now the major money-maker in the restaurant biz, and will likely continue to be for some time. The simultaneous rise of ghost kitchens only adds to this focus on delivery and takeout formats. All of which is to say that restaurants must continue to improve their to-go food, regardless of what happens to same-store sales over the next few months.

Report: November Was ‘The Worst Month’ For Restaurant Industry Sales Since August

Restaurant sales struggled in November, according to Black Box Intelligence, which shared the information in a post on Nation’s Restaurant News this week. The stumble coincides with both rising cases of COVID-19 and colder weather that has made outdoor dining unrealistic. 

From Black Box Intelligence: 

Same-store sales growth was -10.3%, which represented a 3.8 percentage-point drop from October’s year-over-year sales growth rate. November’s -16.3% same-store traffic fell by 3.3 percentage points compared to the previous month’s performance. This was the worst month for the industry since August based on year-over-year losses in sales and traffic.

Sales worsened throughout November, with same-store sales during the last week of November the worst the restaurant industry has experienced in almost four months. Black Box Intelligence suggests this could mean we are “in the middle of a new restaurant downturn.”

These numbers arrived the same week the National Restaurant Association shared new findings on the restaurant industry via a letter sent to Congressional leadership. In that letter, the Association noted that restaurants of all types are in “economic freefall,” with sales declining and more layoffs and furloughs expected in the coming months.

Without large-scale measures, like a relief package from Congress, the restaurant industry’s situation will only get worse, particularly since we’re only at the beginning of winter. Outdoor dining options won’t be possible for at least a few months in many places. Off-premises channels, like delivery and takeout, are important, but as we discussed at length this week, running a restaurant entirely through these channels is economically and operationally challenging for most businesses.

Black Box Intelligence did note that despite poor sales in November, guest satisfaction was higher. Positive reviews of restaurants online grew by 7.0 percentage points compared to the same month in 2019. Intent-to-return scores have almost returned to pre-pandemic levels.