Financing

Longer hours and open dining rooms boost Jack in the Box sales

The burger chain’s same-store sales increased 9.8% last quarter as its dining rooms reopened and late-night business returned to normal.
Jack in the Box sales
Better operating hours have boosted sales at Jack in the Box. / Photo: Shutterstock.

Apparently, restaurants that are open and operable generate more sales.

That, at least, is the lesson from Jack in the Box, which on Wednesday said its same-store sales increased 9.8% in the company’s fiscal second quarter, which ended April 16. The company generated those sales with a combination of higher prices and more traffic.

That traffic was coming in later in the evening and they were more likely to dine inside the stores—because those stores were more likely to have open dining rooms and late-night hours.

“We are getting closer to pre-COVID for operating hours and are now well above 2022 average hours per store,” CEO Darin Harris told investors on Wednesday, according to a transcript on the financial services site Sentieo.

Much of that is coming during late-night hours. Traffic during that daypart has been increasing at fast-food restaurants of late as events have returned in force and more restaurants have found enough able-bodied employees. Jack in the Box has traditionally targeted this daypart as a valuable source of sales, but its pullback during the pandemic and during the labor shortage that followed made it one of the last periods to return to normal.

“We have been particularly focused on owning late-night by increasing hours, specifically on the franchise side,” Harris said. He noted that restaurants on average are open 30 fewer minutes than they were in 2019, but “our franchisees are taking actions and understand that late-night represents a daypart where we believe we can take share.”

“We are making significant headway in our objective to dominate this daypart,” he added.

Dining rooms are open, too. Ninety-eight percent of its system have dining rooms open at least five hours a day and on average, dining rooms were open 13 hours a day, an improvement from the previous quarter. As the environment has normalized, more customers have returned to in-restaurant dining.

Much of what has kept restaurants from keeping dining rooms open or operating at their full capacity has been labor. But more operators are saying they’re at or near full capacity as the labor shortage eases and more workers are willing to take hours they had avoided before. Jack in the Box has increased wages during the late-night daypart to get more people to work those hours.

Numerous chains have also been taking steps to improve recruitment and retention and training. Harris noted that an operations focus at the company led to its lowest turnover in more than a year last quarter. “Thankfully, we are seeing labor availability increase in most of the brand’s geographical footprint,” Harris said.

That focus also helped the chain improve its speed in the drive-thru by 11 seconds per order, Harris said. And its customer experience scores have also improved by 20%, he added.

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