Skip to Content

Delta Variant’s Impact on Restaurant Sales

Delta Variant
Photo courtesy of Torrance Memorial

Black Box Guest Intelligence – which performs workforce, guest, consumer, and financial analytics for the restaurant industry – has recently released its August Restaurant Guest Satisfaction Snapshot outlining how rising Covid-19 cases are impacting restaurant sales.

The report found that the restaurant industry’s upward momentum in sales and traffic is being reversed after several months of sustained growth. In August, due to the Delta variant’s spread, sales growth dropped by 2.1 percentage points to 6.1%. Meanwhile, traffic growth was found to be -5.4%, the worst in the past 3 months. This means August reportedly had the softest sales growth for any month since May of this year. 

When looking at guest satisfaction, guests were marginally more positive about restaurant food during August compared to a year prior – based on reviews and comments made online. In August 2020, food sentiment scores were lower because off-premises sales were much higher. Therefore, August 2021’s minor percentage increase points to the fact that staffing and supply chain shortages continue to generate issues for food execution and, thus, food sentiment. 

Also based on online reviews and comments is restaurant service – which similarly remained pretty constant in August. The biggest drop in positive sentiment year-over-year recorded was related to restaurant ambiance. According to the report, the last 3 months recorded the lowest percentage of positive ambiance mentions since the beginning of this year. 

With all of this being said, sales and sentiments were not consistent across all segments. For example, the downturn in sales was not felt by limited-service brands at all. Here is a look at how the full service segment was affected. 

Full- service Segment Data 

Full-service restaurant sales growth dropped by 3.8 percentage points compared to July’s data. This, in turn, led to less pressure on execution, especially in a staffing shortage. As a result, overall net sentiment for full-service restaurants only increased slightly month-over-month, and the family-dining segment saw the most improvement; the month-over-month guest sentiment of food, service, and ambiance for family dining was particularly strong. Meanwhile, casual, upscale-casual, and fine-dining guest sentiment remained steady for food and service, and only improved with regards to ambiance. 

Combined, all segments in full service improved by 2.2 percentage points in their ambiance net sentiment scores. Interestingly, the report highlighted that ambiance has been a key driver of guest sentiment during the pandemic because of its connection to cleanliness. 

Lastly, the report also looked at the success of specific regions. 

Of the 25 largest markets in the country, Orlando, Florida was found to be leading on positive sentiment in all factors: restaurant food, beverage, ambiance, value, and intent to return. In last place: San Francisco. In August, San Francisco was the second lowest ranked with regards to sales growth and was the lowest in net sentiment with regards to restaurant food, service, and intent to return. New York’s designated market area had the lowest sales growth in August. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

Connect with Andreas Koutsoudakis on LinkedIn.

Connect with Michael Iakovou on LinkedIn.

This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team, or fill out a new client intake form.

The post Delta Variant’s Impact on Restaurant Sales appeared first on KI Legal.
Share To: