Safety protocols will likely keep BJ’s Restaurants from using more than 75% of its dining-room capacities near-term, but the real drag on the casual chain’s sales rebound is the struggle to fill vacant staff positions, executives alerted investors last week.
“To return to pre-COVID sales levels on a sustainable basis, we need to recruit and train more than 5,000 additional kitchen and front of house team members and another 125-plus restaurant managers,” CEO Greg Trojan told financial analysts.
His comment followed indications that customers are eager to dine out again at a BJ’s. More than a third of the chain’s 184 units generated higher sales in recent weeks than they collected in the comparable period of 2019, “which is quite encouraging when you take into account that we're operating still only approximately 70% of our seating capacity,” Trojan said.
He also noted that late-night business, “while improving,” still lags behind the levels of 2019. Many areas of the country have curfews in place to discourage bar and restaurant patrons from hanging around and increasing their chances of contracting the coronavirus.
In addition, chain officials noted that California, where 62 of BJ’s 209 restaurants are located, only recently allowed dining rooms to reopen, and only at 25% of their seating capacities.
“Right now, our sales are ahead of our ability to hire the talented people needed to operate our restaurants at the level expected,” said Greg Levin, BJ’s president. As Greg Trojan mentioned, the key to continuing to deliver our gold standard service as our sales volumes recover is hiring and retaining talented restaurant managers and hourly team members.
One positive, the executives agreed, was a reduction in the amount of kitchen labor needed post-pandemic. BJ’s accelerated its menu reduction and simplification during the crisis, lowering the amount of work that is needed back of house.
Levin also noted that the crunch could ease after federal unemployment insurance subsidies end. “There's less of an incentive sometimes for people to get back into some of these positions that are in the $15 to $20 hourly wage rate right now,” he said.
Trojan was asked by an analyst if the staffing difficulties could be a limiting factor on expansion in 2022.
“Look, we don't have a crystal ball on this,” he responded. “It's our intention to certainly catch up to our sales volumes. Now, we're still not doing quite the sales levels yet, and you do have capacity restrictions. So we don't have to get all these folks hired tomorrow, right?”
BJ’s sales have been rebounding quickly, the executives noted. The brand’s average unit volume hit $97,000 a week in March, a 27% increase from the prior month, Trojan said. He attributed that jump in part to the partial reopening of dining rooms in California.
Average sales per store have topped $100,000 per week this month, he added. At that level, comparable sales are only 7% below 2019 levels.
Trojan stressed that BJ’s intends to continue seating parties at least six feet apart, as recommended by the Centers for Disease Control and Prevention, as jurisdictions raise their caps on what percentage of dining rooms can be put back into use.
Under that measure, he explained, BJ’s is unlikely to use more than 70% to 75% of its interior seating while the six-foot social distancing protocol remains in place.