Upgraded bars and new booths are helping traffic and profits at BJ’s Restaurants, so much so that it plans to invest in even more remodels.
By the end of the year, the chain expects to have 35 to 40 locations undergo a refresh, up from the previously announced 30. Including the nine restaurants it revamped last year, 20% of its 216 stores will be remodeled by year’s end.
The remodels include a brighter and more contemporary bar with a 130-inch television and taps behind the bar rather than along the counter; additional booths; and new tables, artwork and lighting.
One remodel package adds three additional booths to the dining room at a cost of between $150,000 and $200,000. The added capacity has boosted average weekly sales by about $1,500 per store, CEO Greg Levin said during an earnings call Thursday.
The new bars have been even more impactful. Though they cost more—from $400,000 to $700,000—they have generated multiple thousands of dollars in added weekly sales and better profits, Levin said.
Some restaurants have added only new booths, others have redone the bar, and some have done both. But the new bars are performing so well that BJ’s is now going back and adding them to some of the booths-only locations.
“We're trying to concentrate on getting that bar updated and refreshed for our team and for our guests,” Levin said, according to a transcript on financial services site Sentieo.
The remodels are part of the Huntington Beach, Calif.-based chain’s plan to reach $2 billion in annual revenue in the future. Last year, revenue was $1.3 billion.
It inched closer to that goal in the second quarter, when total revenues increased 6.1% to $348.7 million. Same-store sales rose 4.7%, though that came entirely from higher prices. Traffic was down in the low single digits.
Restaurant-level margins, meanwhile, rose 260 basis points, to 14.5%. BJ’s has been focused on improving those margins, in part by cutting $25 million from its four-wall budget. It met that benchmark in Q2, with savings across food, labor, operating and occupancy costs, Levin said.
BJ’s stock was up nearly 10% on Friday after the strong earnings report.
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