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Operations

How Wingstop is thriving in the midst of a pandemic

The fast casual’s CEO shares its blueprint for success and reveals the chain’s next potential moneymaker.
Photo courtesy of Wingstop

Last year, Wingstop CEO Charlie Morrison told an interviewer, “My concern tends to be on the things we cannot control.”

Morrison added: “The flip side of it is, as long as we focus on the things we can control, we should do well for the next 25 years.”

Less than a year later, Morrison’s Dallas-based fast-casual chain—along with the rest of the restaurant industry and the world—would face an unprecedented challenge in the form of an uncontrollable viral pandemic.

And what did Wingstop do? As Morrison predicted, the chain focused on what it could control. And, at a time when a number of chains were struggling or filing for bankruptcy, its same-store sales soared more than 33% in April.

Now the chicken wing chain has another plan in the works to boost off-premise business in the coming months: ghost kitchens.

A tech company that sells wings

Wingstop, like many chains, had a disaster plan in place. It was ready for floods, hurricanes, tornadoes, maybe an act of unfortunate violence at an individual unit.

“The pandemic is a completely different world,” Morrison said.

On March 16, the chain closed all 1,413 of its dining rooms. It shut down its corporate offices. And it shifted its focus to takeout and delivery only.

But really, shifting focus wasn’t that much of a stretch for the technology company masquerading as a wing chain.

Morrison has the clearly stated goal of converting 100% of Wingstop’s transactions to digital mode. Right now, 65% of sales are made via the chain’s digital channels, and 75% of orders are for off-premise consumption. Not only do digital transactions require less labor, but they also carry a $5 higher check average for the brand.

“There are a lot of reasons to focus on digital,” he said.

Of course, there’s the added boost of gathering consumer data via those channels.

On the granular level, Wingstop is using that data to suggest that a customer branch out and try a different one of the chain’s 11 wing flavoring options.

“It’s an easy way to personalize it and perhaps generate another occasion we wouldn’t have gotten before,” Morrison said.

Don’t look for Wingstop to send customers dollar-off offers. (“That’s not our strategy,” he said.) Instead, the chain will use its increasingly robust data to build deeper engagement among its fans.

Working the plan

Once the coronavirus became a clear threat, Wingstop formed a COVID-19 task force made up of key leadership across the organization. The group met twice a day in those early weeks, drafting information to send to franchisees through the company’s Wingnet intranet system. There were weekly all-company meetings with the operations team and frequent all-franchise online gatherings for the 270 franchisees.

“The strength of the culture of our company is that it’s open,” Morrison said. “It fosters a deep sense of teamwork and trust. We’re very collaborative as an organization. We’ve been coaching that into the organization. Other companies have meetings. But Wingstop is unique and different and we could pivot and make the right investments.”

The company has experienced no supply chain issues, he said.

But it did see all live sports vanish in an instant. So it swiftly morphed its ad strategy to focus on other gaming and streaming services.

“I’ve been an advocate for a long time with shareholders that carry the perception that because we sell wings, we must be sports,” Morrison said. “Wings are an occasion for any time of day and for any reason. When we lost the NCAA tournament, as well as the NBA, we haven’t missed a beat. We’ve grown.”

Ghost kitchens

An “enterprising franchisee” in the U.K. was the first to try a Wingstop ghost kitchen, with no dine-in seating, geared solely to off-premise occasions.

Now, Wingstop is plotting the small-footprint operations in this country, starting in Dallas.

“Then, after that, we expect those to show up in cities all over the U.S.,” he said.

The 1,000-square-foot units, about 700 square feet smaller than a typical Wingstop, will fit in streetside locations and in major metro areas that have previously not been a good fit for the chain.

Morrison hopes, with approvals completed, the Dallas ghost kitchen will open this summer, but pandemic-related delays are likely.

As part of the plan to ease guests into completely digital transactions, Wingstop is testing voice-ordering technology. The trial is only at a couple of restaurants currently, but it’s “not too terribly far out,” he said.

“It allows us to have a conversation with the guest on the phone, an automated answering service that takes your order and customizes the product,” he said. “It does it in a natural-voice way. It’s pretty neat. I’ve tried it. It works. I’ve tried to stump it a couple of times. It’s done a good job.”

With its strong focus on digital strategy and building its off-premise business, Wingstop hardly misses its dine-in sales. In fact, the chain is logging a larger number of family orders, rather than individual checks, during the pandemic.

Morrison has seen spikes of coronavirus cases in states that have reopened their dining rooms, and he said he is in no rush to do so.

“We’ll probably be one of the last ones to reopen,” he said.

 

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