Jack in the Box Reports Strong Demand for First-Party Channels

For the third consecutive quarter, digital carryout business is surpassing delivery growth. First-party channels increased 36% YoY.
Anna Wolfe
Senior Editor, Restaurants
wolfe

Jack in the Box’s digital orders continue to increase and are currently 12% of sales. “We will continue to support our restaurants and franchisees to grow their digital business, eventually reaching our next goal of 20%,” said CEO Darin Harris in an earnings call with analysts to discuss Q4 and fiscal 2023 earnings on Nov. 21.

“Digital carryout continued its momentum, surpassing digital delivery growth for the third straight quarter. Our first-party channels, which include app and web ordering, outpaced third-party and rose 36% higher than a year ago," he said.

“We are gaining traction, which allows us to both capture important guest data and utilize an efficient method of providing compelling offers to guests.” 

The brand’s Jack Pack Rewards program, increased membership by 23% vs. Q3 and achieved 90+% growth rate in 2023 versus 2022, he added.

Jack in the Box's Q4 and fiscal 2023 earnings

Jack in the Box is also the parent company for Del Taco.

  • Jack in the Box same-store sales of +3.9% in Q4 2023, +7.3% for FY 2023
  • Del Taco same-store sales of -1.5% in Q4 2023, +1.7% (1) for FY 2023
  • Jack in the Box and Del Taco opened 34 restaurants in FY 2023, including net positive unit growth and a growing development pipeline for both brands
  • Del Taco completed the refranchising of 111 restaurants in FY 2023, which included development commitments for 109 new restaurants

Marketing Matters

Using those data insights is key to crafting the appropriate messaging for digital offers that connect with guests across all demographics.

While we see strength from our higher income guests, this lower income segment remains pressured and an opportunity for us to find the right value and breakfast offering,” Harris explained. “Our focus on employing culturally relevant messaging at Jack through fiscal 2023, led us to team up with personalities such as Mark Hamill and Ryan Reynolds earlier in the year, and more recently, Snoop Dogg.”

On the Horizon: a New POS

On the tech front, Jack in the Box is among the brands shopping for a new POS.  

We are very close to announcing Jack's new POS provider, with implementation set to begin shortly and system-wide completion still slated to take place by the end of fiscal 2025," Harris said.  “By modernizing our restaurant tech stack, it will facilitate cost savings, improve back-office systems, support automation, and help us achieve our digital objectives. We believe this technology is the center of our ability to deploy applications that can have a meaningful impact on the guest experience and drive increased sales and profitability. Our growth potential correlates to our ability to continue growing restaurant profits, which showed significant improvement in fiscal 2023."

 

Golden State Update

Harris addressed the impact of  AB1228, the California law that raises QSR’s minimum wage to $20 per hour beginning April 1, 2024, among other things. 

It “will certainly affect labor competition within the entire restaurant and retail industry in California. We are confident in our ability to manage through this, helped by our unique franchisees scale and decades-long experience operating within the state. We will rely on pricing, margin improvement initiatives, and unique guest loyalty in California where both brands have been beloved for over 60 years.” 

Since launching its Jack development program in mid-2021, the company has signed a total of 90 agreements for 389 restaurants, including Mexico in mid-2024, as well as Florida, Arkansas, Montana, and Wyoming thereafter.

New Prototypes, New Markets

Its two newest Jack markets, Salt Lake City and Louisville, were the first new market openings at Jack in the Box in over a decade.  “We view both of them as indicative of how we are approaching development related to prototype design, and building brand awareness before and after entering the market,”  explained Harris. “We have a strong playbook for how to open new markets so that the brand thrives… The four restaurants opened throughout 2023 in Salt Lake City (including a drive-thru only location) and Louisville with our new Crave image prototypes have outperformed expectations.”

Del Taco, which Jack in the Box acquired in 2022, is undergoing a refranchising: 111 were refranchised last year. "There is a clear demand-driven path to re-franchise approximately 120 restaurants over the next three years, which would get Del Taco to over 90% franchised by the end of 2026," explained Harris.

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