What is in this article?:
- Buffalo Wild Wingsâ€™ new pricing, service model build brand confidence
- Building beyond the core business
Chief operating officer James Schmidt says guests have had few complaints about the new pricing structure.
Buffalo Wild Wings’ new wing pricing structure and guest-focused service model got off to a solid start in the third quarter, company officials said, giving the company confidence in future growth.
During the Sept. 29-ended quarter, in which net income grew 66.9 percent to $17.9 million, the chain rolled out a new pricing structure systemwide to sell wings by portion size — snack, small, medium and large — rather than by discrete numbers of wings. The move accounted for one-third of Buffalo Wild Wings’ 1.2-percent reduction in food costs for the third quarter, to 30 percent of sales, chief financial officer Mary Twinem said.
Chief operating officer James Schmidt added that servers and managers were thoroughly trained to explain the change to guests, who had few complaints about the new pricing structure.
“We haven’t seen any issues with its acceptance in any particular area at all,” Schmidt said. “We see no evidence of any adverse impact either on same-store sales or our wing sales. We captured the [cost of goods] improvement that we hoped to capture as a result of the rollout, and guest loyalty and value perception across our system have held fairly steady.”
Buffalo Wild Wings also began implementing its “Guest Experience Model” to company-owned units during the quarter, in which “guest experience captains” were added to hourly server teams to accommodate customers’ sports-viewing experience and to guide in the use of new in-restaurant technologies, like tableside tablets for playing games and trivia.
Twinem said the new service model, in place at about half the brand’s company-owned system, contributed to a slight 0.2-percent increase in labor cost to 30.3 percent of sales in the third quarter, as higher hourly labor was partially offset by efficiencies in a new manager structure.
Chief executive Sally Smith said the brand would “remain focused on providing a unique, compelling and social sports-viewing experience for our guests through our Guest Experience Model” and expand the service style to the remaining 50 percent of the company-owned system by the end of 2014.
Through the first four weeks of the fourth quarter, same-store sales are trending up 5.3 percent at company-owned locations and 3 percent at franchised restaurants, Twinem said. She added that the Minneapolis-based company anticipates opening 54 corporate Buffalo Wild Wings restaurants and 53 franchised units in the United States and two international franchised locations for the full fiscal year of 2013.