Jamba Juice is banking on drive-thrus as a key component of its turnaround strategy for the coming years, executives from the quick-service smoothie chain revealed in a conference call this week.
The chain’s total revenue declined $6.1 million in the 39-week period ended Oct. 3, 2017, compared to the same period of the previous year. Same-store sales rose 1.9% during that period, the company announced.
The chain’s tests of third-party delivery in 2017 were a bust, CEO David Pace said during the earnings call.
“While we were able to drive increased transactions during promotional periods, we did not see sustained sales when the promotional discounts were ended,” Pace told analysts. “We believe this is largely due to the lower average ticket and resulting higher percentage of delivery cost as a percent of the total transaction cost.”
Drive-thrus, meanwhile, have shown continued success for the chain at franchised locations. Jamba Juice has signed a letter of intent with Walmart to test small-format drive-thrus in two of the big box retailer’s parking lots at Texas stores.
“If successful, this format and relationship can unlock a significant expansion opportunity,” Pace said, adding he expects them to open at the end of the second quarter.
Jamba Juice is building its first company-operated drive-thru, slated to launch in San Diego in the middle of 2018. About a quarter of the 50 new units the chain expects to open this year will have drive-thrus, he said.