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How Dave & Buster’s is shaking up its labor model

The eatertainment chain is investing $5 million in recruitment and retention efforts and is using tech to take over some hands-on services.
Dave & Buster's
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Dave & Buster’s is earmarking $5 million this year for recruitment and retention efforts during a historically challenging labor market, while also using technology to take over some operations once handled by employees.

Pre-pandemic, the 141-unit eatertainment chain had about 14,000 employees. It currently has nearly 12,000 workers as it ramps up to full re-opening as the pandemic eases around the country.

The $5 million will be used for hiring programs and retention incentives, COO Margo Manning told analysts during a call to release Q1 earnings Thursday.

“This is a significant investment that has been thoughtfully placed to help us attract the talent that we need to capitalize on the upcoming summer season,” Manning said.

Dave & Buster’s also revealed it is “evolving” its service model to include more tablets and a mobile web platform that allows for contactless ordering and payment in its restaurants, she said.

That model is currently in more than 50% of the chain’s locations, with plans to have it deployed systemwide by July.

“The stores operating on this platform have been able to expand the size of server sections and reduce staffing levels to be more efficient,” Manning said.

Two stores, one in Dallas and one in Times Square in New York City , are testing phone-based ordering inside the restaurants.

“This is a pretty transformative change in terms of how we’re thinking about using technology to really transform the service model,” CEO Brian Jenkins told analysts. “We’re talking about really moving the transaction piece, so the experience [shifts] over to the technology and the roles are being rewritten … It’s been a lot of work and it’s evolving. I think it could be very transformative for our brand.”

Dave & Buster’s labor costs are currently increasing because of having to pay overtime due to understaffed locations, CFO Scott Bowman said. Bowman said he expects that to moderate as the year goes on as “unemployment benefits start to go away in early September.”

“In the meantime, we’ll continue to augment with some overtime, but also with the technology that we’ve talked about with the tablets and service model, that’s definitely helping us as well as fewer operating hours for the time being,” he said.

Dave & Buster’s released its earnings Thursday for the quarter ended May 2. The chain said it had reopened 138 of its stores. It reported total Q1 revenue of about $263.3 million, about $100 million less than it took in  during the same period in 2019.

 

 

 

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