BJ’s Restaurants Inc. has reduced its menu by 15% in the third quarter and provided new scripting for waiters as it works to maintain traffic, company executives said Thursday.
Huntington Beach, Calif.-based BJ’s, which reported earnings Thursday for the third quarter ended Oct. 3, said same-store sales increased 0.4% in the quarter.
“In the third quarter, to enhance our already high service and hospitality standards, we rolled out new server scripts as well as an updated mystery shopper program focused on consistently delivering gracious hospitality to our guests,” said Greg Levin, BJ’s CEO, in an earnings call.
“As a result of these recent programs,” Levin said, “we have increased hospitality scores year-over-year on our guest surveys. Additionally, our hourly and management staffing levels continue to improve year-over-year as we narrow the gap to pre-COVID levels. In fact, our hourly team member retention rate in September matched our pre-COVID level illustrating our improving operating environment.”
BJ’s also trimmed its menu with 15% fewer items, based on consumer research, which improved operations, Levin said. He had said earlier that the menu reduction would would allow the company to improve daily execution while reducing inventory and prep hours.
“In the third quarter, we rolled out our Big Twist Pretzel paired with BJ's Brewhouse Blonde Beer Cheese and the Hickory Brisket Nachos for a limited time accompanied with a line of margaritas, including our new White Peach Boba-Rita,” he said. “Importantly, our culinary and beverage innovation is working to grow sales adding both incidents and dollar sales to the appetizer and cocktail categories.”
BJ’s also rolled out a limited-time, in-store-only Spooky Pizookie with orange-colored vanilla ice cream and a chocolate syrup that guests pour from a cauldron over their dessert, which hardens to make a chocolate shell.
“Our Spooky Pizookie has exceeded our expectations becoming our No. 1 selling Pizookie this October and selling out sooner than anticipated,” Levin said. “Given the extraordinary guest excitement and demand for this product, expect to see Spooky Pizookie back next year.”
BJ’s is also refreshing part of its restaurant stable with remodels.
“Guests don't want to visit old worn-out restaurants, with wobbly tables, dirty floors and broken chairs,” Levin said.
“Our remodel program focuses on that relevant ambiance, by providing enhanced seating capacity an updated bar statement, new lighting artwork booths and tables,” he said. “The new bar statement is amazing and includes a much lighter more contemporary bar feature featuring a new 130-inch television that screens Brewhouse Theater. We are still targeting between 35 and 40 remodels this year, and we expect to have remodeled at least 20% of our restaurants by year-end.”
Tom Houdek, BJ’s chief financial officer, said the remodels and new restaurants led the company to target the high end of its $90 million to $95 million range in capital company expenditures for the year. The company also invested $2 million to purchase upgraded server handheld tablets for about half of its system.
The remodels vary in scope, he added later.
“The lower scope, where we've been adding a few extra booths and doing some of the touch-ups around the restaurants, that's about $250,000. And those are seeing in the neighborhood of about $1,000 or $1,500 extra on a weekly sales basis,” he said.
Larger-scale remodels, which include the bar overhaul and painting on the outside, can grow to “$600,000 or $700,000 or even a little higher,” Houdek said.
The company is also working on a prototype for new builds, they said.
“We submitted new plans for the majority of our 2024 openings so that we can roll out our new prototype that will save us approximately $1 million per build versus our current prototype,” Levin said. “Additionally, due to a more efficient layout, this prototype should provide an opportunity for labor optimization.”
Levin added that BJ’s wants to continue to understand how the consumer preferences are changing.
“Some of it comes down to off-premise and where we're building our restaurants,” he said. “So if we're building our restaurants in certain markets, maybe in California, we might use a little bit of a larger format because we know the California brand awareness of the BJ's concept. Going into some of the different markets that might be a little bit smaller, having that smaller prototype is going to give us better efficiencies in those restaurants.”
For the third quarter ended Oct. 3, BJ’s net loss was $3.8 million, or 16 cents a share, narrowed from $1.6 million, or seven cents a share, in the prior-year period. Revenues increased 2.3%, to $318.6 million, from $311.3 million in the year-ago quarter.
BJ’s, founded in 1978, owns and operates more than 200 casual-dining restaurants in 30 states.
Contact Ron Ruggless at [email protected]
Follow him on X/Twitter: @RonRuggless
