This is grilling season for restaurant chain executives, but they’re on the wrong end of the spatula. It’s conference-call time, when public-company CEOs are called before investors to justify the strategic direction of their charges and answer often pointed questions about boosting sales, cutting costs and generally making shareholders richer. For eavesdropping students of the business, it’s like having candy tossed to you from a parade of Mardi Gras floats. Enjoy a few gumdrops yourself from the last two weeks of calls:
Cake as sales frosting
A little-noticed boost to Dunkin’ Brands’ second quarter revenues came not from the company’s core Dunkin’ Donuts business, but from Baskin-Robbins. Online sales of ice cream cakes are hot for the treat concept, explained CEO Nigel Travis. Transactions have gotten a boost from cutting the required pre-order time in half. Customers can now order a cake via the internet just 24 hours before the desired pick-up day, instead of 48.
Pricing tiers, take II
Denny’s price-tiered menu has been a huge success for the family chain, but the sales bump hasn’t been evenly distributed across all four price levels, said CEO John Miller. Patrons are pulled more to the $2, $4 and $6 price groupings, he explained, with the $8 echelon emerging as more of a treat. Part of the reason: The $8 price is really higher. Initially, an $8 meal included a beverage, but now the soft drink has to be ordered a la carte for just that tier, so the price is actually higher by a fairly significant measure.
The sales mix won’t be a surprise to BJ’s Restaurants. CEO Greg Trojan revealed that the company believes there’s an opportunity in adding a tier of $6 appetizers as an alternative to the current array, which tends to run in the $9 range. “We think we will drive bigger incidents by going after those kind of price points--items that are quicker, grab-and-go kind of items,” Trojan said. For reasons he didn’t explain, BJ’s expects the lower-priced apps to “drive turns as well.”
Traffic through marital bliss
Denny’s Miller also revealed, in direct response to an analyst’s question, that the wedding chapel in a new Las Vegas store has been a hit. Thirty-three couples have tied the knot in the restaurant, which is enjoying heightened traffic from the temporary closing of Denny’s busiest facility, a nearby unit that typically collects $8 million a year. The unit has been shut for renovation.
Maintenance before the snap
Analysts were curious as to why Buffalo Wild Wings’ maintenance costs are spiking. There’s no mystery, explained CEO Sally Smith. The chain buffs and fixes stores during the second quarter to offset the wear and tear on units during football season. She called it “our favorite time of the year” because of the sales and traffic that are generated by pro and college games.
New digital amenities for guests
BWW was among the first chains to offer technology for guests’ use. The chain will be an early adapter again when it tests a way for guests to pay for meals via smart phones and tablets, said COO James Schmidt. That set-up is already being tried by BJ’s Restaurants. Schmidt disclosed that BWW will also outfit servers with handheld devices in a separate test, and the company said that tabletop ordering options will be expanded to include the core menu, not just drinks and appetizers.
Cheesecake’s new partner
Partnerships have never been a big part of The Cheesecake Factory’s phenomenally successful business model; other than opening a few scaled-down non-traditional units in collaboration with concessionaires, the company has insisted on owning and operating all its stores. But that’s changing as the brand goes international. The company announced last week that one of its new overseas partners is no stranger to hospitality. The Cheesecake brand will be licensed in Asia to Maxim’s, the string of nightclubs that briefly operated in the U.S. as well. Maxim’s is a well-known luxury brand on the European continent.