The Cheesecake Factory may be shopping for an acquisition.
CEO David Overton told financial analysts yesterday that the company is “looking at options in addition to The Cheesecake Factory restaurants to support meaningful growth into the future,” and that includes “new concepts whether internal or external.”
Pressed for details, Overton acknowledged that “we are evaluating both internal and external concepts, and we have been doing that for awhile.” He revealed that any new venture would overlap the casual market, be it a traditional full-service player or a fast-casual format.
The possibility of buying or starting a concept was one of several initiatives outlined by executives during their quarterly conference call with analysts. The company intends to build traffic, cited by officials as a top priority, by reviewing throughput at the end of every shift to gauge speed of service. “We believe that running shifts with a specific and conscious focus on throughput and assessing performance at the end of each shift can lead to further improvements,” said President David Gordon.
Gordon also revealed that the chain is rolling out a new tablet-based training program to woo consumers whose rating of service throughout casual dining has been slipping in recent years.
A mobile payment app is being developed to enable payment from the table. Executives indicated that giving servers handheld order-placement devices or installing guest self-ordering systems might not be feasible because of the extent and complexity of Cheesecake’s menu.
In regard to costs, Gordon mentioned that the chain is just starting to install new equipment to reduce energy consumption.
He also noted the chain’s new technologies for cutting food waste and scheduling labor more astutely. The officials noted that their labor costs will likely rise this year by $10 million to $12 million, with $4 million of that attributed just to increases in the minimum wages of areas where the company operates.
CFO Doug Benn disclosed that guest visits to Cheesecake restaurants declined 1.2 percent during the fourth quarter.
A 1-percent increase in guest traffic equates to serving 14 more customers per restaurant per day, “which is achievable,” Overton said.
He noted that the company has set a target of opening 300 Cheesecakes in the United States, and is currently at 177 stores, or 60 percent of the goal.
The company already has two alternative growth vehicles within its fold. Grand Lux Café is an upscale tweak of the Cheesecake Factory, but shares many of the same menu items.
RockSugar Pan Asian Kitchen is a polished-casual restaurant specializing in the foods of Vietnam, Thailand, Singapore and Malaysia. Only one is currently open.
Gordon indicated that the company is not giving up on Grand Lux, and is working to increase the concept’s profitability. He echoed Overton’s willingness to try “anything and everything within our strengths of casual dining” to bolster sales.
Cheesecake is “actively working” on the development of additional concepts “with the goal of having at least a couple of opportunities prime within the next few years,” Overton said.
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