It’s clear Wingstop CEO Charlie Morrison isn’t losing much sleep over the recent proliferation of delivery-only chicken wing brands.
“It’s interesting,” Morrison told analysts Wednesday. “We’ve arrived at the point that we believe chicken wings is the answer to same-store sales growth. Having a robust digital infrastructure already in place and a proper delivery partner have more to do with the strength of the brand than anything else.”
The only thing competitors such as Brinker International and Applebee’s are doing right now, he said, is “impacting the price of commodity costs.”
It’s easy to see why Morrison would be dismissive of the young wing upstarts, given the year Wingstop has had despite (or because of) the pandemic:
- Average unit volumes increased to $1.49 million in Q4, compared to $1.25 million during the same period in 2019
- Same-store sales climbed 21.4% for the year (and 18.2% in Q4) over year-ago numbers
- Wingstop had 153 net new store openings in 2020, a unit count bump of 11%
- Systemwide sales grew 28.8% in 2020, to $2 billion (“An exciting inflection point for Wingstop,” Morrison noted.)
Wingstop’s new competitors are pricing their wings low to generate traffic, he said.
“We know that’s not sustainable,” Morrison added. “We’re going to continue forging ahead on our strategy.”
Central to that strategy is aggressive unit growth, fueled by existing franchisees who are seeing the chain’s success and are looking to add units, he said. Currently, there are about 700 new restaurants in Wingstop’s development pipeline, about 100 more than there were a year ago.
“It’s the largest pipeline we’ve seen as a brand,” he said. “The name of this game is about unit growth. Too often we get hung up on same-store sales.”
Wingstop, which currently has 1,327 U.S. franchised locations and 1,538 restaurants systemwide (including international units), would like to have at least 3,000 restaurants in the United States and 6,000 global stores.
Much of that growth is coming through digital sales, which made up 40% of Wingstop’s business pre-pandemic and now accounts for 62.5% of sales.
It’s also Wingstop’s first full year with delivery available systemwide, a channel that now makes up a quarter of its total sales.
“Guests that use us for delivery are typically new to our brand,” Morrison said.
Dallas-based Wingstop currently has 20 million digital customers in its database and plans to target one-to-one marketing to those diners this year.
The biggest pressure on the bottom line has come from increased demand for chicken wings, with the price of bone-in wings climbing 17.7% from a year ago. Deals with suppliers are keeping that inflation in check, Morrison said.
“Thank you to our suppliers,” he said. “They have been with us, knowing we will be a wing buyer in this market for the long haul.”
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