BJ’s Looks to Catering, Beer Club to Boost Bottom Line
During its Q3 earnings call with analysts, BJ's Restaurants Inc. revealed future technology initiatives.
Q3 comparable restaurant sales were negative 0.3% but CEO Gregory Trojan remained optimistic during an earnings call with analysts. “Despite the near-term industry headwinds, we continue our over two-year trend of outpacing the industry in both sales and traffic while lapping last year's 6.9% comp sales increase,” he said, citing Hurrican Dorian and California wild fires as factors that had negative impact during the quarter.
A full earnings report is available here.
Off premise remains a bright spot for many restaurants including BJs. “In addition to the more challenged industry backdrop, our off-premise channel growth, while still very healthy, has slowed versus last year and there are a couple of reasons for this,” explained Trojan. “First, we're now comping against the full roll out of third-party delivery across our system and we intentionally pulled back on the level of third-party delivery promotions we offer.”
Without the boost of free delivery promotions, third-party delivery is slowing down for BJ’s. Off-premise is growing double digits.
“As third party marketplaces have gotten crowded with other restaurant concepts, many of whom are attempting to drive trial promotionally, the productivity and economics of offers such as free delivery have diminished considerably. While this has reduced the pace of delivery growth, we're happy to be building a profitable solid foundation in the off-premise channel versus buying unprofitable sales,” said Trojan.
Catering
Earlier this year, BJ’s rolled out a new catering platform, which Trojan described as a “top-line initiative.
“These new offerings are doing extremely well generating around 25% growth, albeit on a small base for us. We know this is a large opportunity across all our markets, especially as we approach this year's busy holiday season.”
BJ’s is optimistic that its new Beer Club will capitalize on five breweries while driving traffic to the restaurant. The paid subscription model leverages its award winning in-house brewing capability. Testing is planned for early 2020 at select California locations. BJ’s declined questions for additional details citing competitive concerns.
New Tech
BJs is also looking at adding more technology to its restaurants. “At the same time we keep exploring and developing new technology to reduce, and in some cases, eliminate pain points and bottlenecks for our guests and team members,” Trojan explained.
Recent additions include mobile on-premise ordering and pay at the table.
“We know there are even more great opportunities through technology and innovation to make the sit-down dining experience even quicker and easier and therefore more accessible and enjoyable,” said Trojan.
BJs has begun testing the ability for guests dining in restaurant to use their mobile phones and other mobile devices to reorder drinks and pay their checks without having to download the BJ’s app. The restaurant is looking at expanding that same functionality to include ordering of drinks, appetizers and entire meals -- including while they’re waiting to be seated.
“While we continue to believe that downloading our app delivers a lot of value to our most frequent guests and builds our customer loyalty database, we know that it is a barrier to greater adoption rates for some less frequent guests,” said Trojan. “We're excited about the prospects for this new technology to solve the downloading and app issue for these guests as we provide them tech-enabled convenience features to make their dining experiences at BJ's even better.”
Photo by Edward Franklin on Unsplash