Sales through digital channels are big business for Wingstop, accounting for 40% of sales.
"We ended 2019 with 39% of sales through digital channels, and I’m pleased to share we have already surpassed 40% in January,” said CEO Charlie Morrison in a Q4 and fiscal 2019 earnings call with analysts. At 160 locations, online sales have exceeded 50%.
2019 marked the 16th consecutive year of positive same store sales growth and system-wide sales increased by 20.1%. The full earnings release is available here.
Digital orders too are average $5 more per order, “which is additive to our top-line growth,” said Morrison. “Our pillar of sustaining same-store sales growth is supported by our strategies around national advertising, delivery and digital expansion.”
With the shift to off premise and online ordering, speed of service may not matter as much as it used to in traditional U.S. locations that catering to large dine-in group orders compared to non-traditional locations, such as airports, kiosks, sports stadiums, which tend to be more individual occasions, Morrison explained.
CFO Michael Skipworth said the brand is “going to continue to test some technology within the restaurants to figure out how we can make the ordering process for the guests more seamless as well as the pickup of the product.”
The Lowdown on Lockers
Wingstop is among the restaurants looking at reducing friction in the online order pickup process, and is testing self-service lockers at a number of locations to reduce congestion in the restaurant around in-store payment and order pickup, “and we have seen benefit of that,” Morrison said.
Wingstop is proceeding with caution, because “the investment cost of lockers can be significant,” and they also require “substantial” BOH technology to sit on top of the POS system that processes the online orders and directs the orders to the lockers and passes that information back to the guest, he added.
Loyalty, Wingstop Style
Wingstop does not have a traditional loyalty program per se. “ We’ve opted not to pursue a loyalty program that has a ‘if you buy you get’ a type of approach, instead we’ve built a robust CRM platform that allows us to connect with guests during their purchase experience and after the purchase as well as before and tailor messages and opportunities to them that would encourage them to seek out a new flavor or (new item) …
“We found that, that actually is good at building check without discounting. It’s a great way to engage with our guests,” Morrison explained. “And I think if you look at the performance of the brand and the 16 consecutive years of positive comp store sales without discounting, we feel that we have a long runway ahead of us without having to use a program like that to ensure frequency.”
The brand does invest in advertising and launched national delivery with DoorDash last year, which generated an 11.1% comp for the year.
Wingstop too is pushing its concept in Europe and beyond. In Q4 the brand opened its first ghost kitchen the UK.