Second quarter 2015 concluded with the restaurant industry posting strong same-store sales numbers, although still losing guest count growth year-over-year. Same-store sales growth was 1.8 percent during Q2, which represents a 1.1 percent slowdown from the growth rate reported for Q1. However, weather distortions during the first three months of the year render the comparison somewhat invalid. Of greatest importance is that the industry has now posted four consecutive quarters of positive growth; each of those quarters posting growth rates above 1.0 percent. The average quarterly same-store sales growth during the last four quarters was 2.1 percent, a sharp turnaround from the average negative 0.5 percent quarterly growth reported for the previous four quarters. This insight comes from data reported by TDn2K’s Black Box Intelligence through The Restaurant Industry Snapshot for June, based on weekly sales from more than 22,000 restaurant units representing $55 billion dollars in annual revenue. Newest members of Black Box Intelligence include Darden Restaurants and TopGolf.

During June, the restaurant industry experienced its eleventh consecutive month of strong same-store sales. 2015 same-store sales growth has surpassed 2.0 percent during four of the last six months.

Positive sales growth notwithstanding, the chain restaurant industry continues to be competing in a market share battle fueled by declining guest counts. Same-store traffic growth during Q2 was down 1.7 percent, a 1.2 percent decline from the growth rate reported for Q1 and the worst quarter in terms of traffic growth since Q2 of 2014. The industry has now posted three consecutive quarters of deteriorating traffic results and has yet to achieve a quarter of positive same-store traffic growth in the last four years.

“We’ve observed a clear pattern of consumer behavior since the recession: people are increasingly choosing chain restaurants less often when it comes to their dining decisions. Increased same-store sales continue to result from people spending more per visit than through visiting chain restaurants more often. Grocers, convenience stores, food trucks and other food away from home options are also making the market share battle tougher for restaurateurs,” says Victor Fernandez, executive director of Insights and Knowledge for TDn2K. Growth in average check-per-guest increased by 3.4 percent year-over-year during each of the first two quarters of 2015. As a comparison, during all of 2014 average guest check increased by only 2.4 percent year-over-year.

Fernandez adds “Consumer confidence remains relatively strong, people are feeling better than they did a year ago in terms of the economy. They are spending more when dining out, a result of brands raising their prices but also consumers electing to spend a little more on each visit. They are ordering that extra appetizer or dessert or shifting their spending to pricier items within the menu. However, the one thing they are not doing is increasing their visits.”

Regarding job growth, the labor market rebounded strongly during April and May after a sharp slowdown during March. The restaurant industry followed suit according to the latest job growth numbers reported by TDn2K’s People Report. The number of restaurant hourly employees and managers grew by 3.0 percent year-over-year in May, an improvement of 0.7 percent over the job growth reported for April. With these latest results the restaurant industry continues to prove its key role in job generation for the U.S. economy. On average, during every month since January of 2014 the restaurant industry has created jobs at a pace of 3.5 percent year-over-year. As a comparison, the U.S. economy has created jobs at an average pace of just 2.0 percent year-over-year for all months since the beginning of 2014, according to the Bureau of Labor Statistics.

“As the economy keeps creating new jobs and the unemployment rate continues its slow descent, the competition for available employees intensifies and the incentives for current employees to pursue new opportunities also increases,” says Fernandez. “As a result, we continue to see turnover in the restaurant industry rise.”

Rolling 12-month restaurant manager turnover and restaurant hourly employee turnover increased during May. Management turnover has now increased during eleven of the last 12 months, while restaurant hourly turnover has increased steadily for 21 consecutive months. Expectations for the rest of the year point towards continued job growth, rising turnover levels, and high levels of restaurant vacancies based on the People Report Workforce Index for Q2 2015.

According to TDn2K’s White Box Social Intelligence, of three key restaurant guest satisfaction attributes (“food”, “service,” and “intent to return”), food continues to be the most prevalent at 74 percent of all social media mentions and “service” is becoming increasingly important. In January, only 7 percent of all mentions were related to service, this percentage has been steadily increasing and as of June, 20 percent of all posts are based on this key attribute.

Only 20 percent of all online service mentions during June were positive; by contrast 30 percent of all food mentions and 33 percent of all mentions regarding “intent to return” referred to restaurant brands in a positive light. Data suggests that although people are increasingly talking about service when they post content online, it is more likely that they do so when their experience was not particularly good.

The top performing industry segment based on percentage of positive online mentions for food and for intent to return was Casual Dining. The segment with the highest percentage of positive service mentions was Upscale Casual/Fine Dining for the second consecutive month. The top-performing segment based on positive mentions has been either Casual Dining or Upscale Casual/Fine Dining for each of these three key attributes since March of this year. According to this data, it seems that the higher the guest check, the more likely that a consumer will comment online when having a good experience at a restaurant.