BJ’s Restaurants’ Q1 revenue jumped by more than 14% to $341.3 million, setting a quarterly record for the company. Comp sales increased by 9%, while restaurant-level margins jumped to 12.6% percent, versus 9.8% last year.
Weekly sales averaged more than $121,000 per week per restaurant in Q1, or more than $12,000 higher than last year. Traffic was also positive – in the low-single-digit range. Notably, the company is running pricing in the mid-7% range with no resistance or trade downs, executives said during the Q1 call Thursday. This pricing pace is lower than the full-service category, which remains 8% higher than March 2022.
BJ’s current momentum has come from several initiatives put into place in the summer of 2021 when Greg Levin was named CEO. Among those is a remodeling plan focused on a “high energy, polished casual positioning and brewhouse theater environment.” Elements include additional seating, a new 130-inch TV, new lighting, artwork, booths and tables, and an updated bar with lighter, contemporary features. Thirty restaurants are expected to complete their remodel this year and those that have already been completed are driving incremental cost sales, Levin said.
BJ’s menu has also contributed to positive momentum. Last year, the company began testing a smaller menu focused on core items and the test proved successful, Levin said. With those results as a guide, BJ’s will launch a new menu in July with approximately 10% fewer items and about 20 fewer SKUs. This will allow the company to improve daily execution while reducing inventory and prep hours, Levin said.
“It will also allow us to introduce future menu innovation while keeping our overall menu tight,” he said.
The test went through several iterations to ensure overall sales weren’t compromised. For example, some appetizers were removed and then added back on once the company realized those upsells decreased. The company also removed its side wedge salad and then re-added it once consumers proved they weren’t switching to any alternatives.
“People who want a wedge salad will not switch to a house or side Caesar salad, so all of a sudden, we lost side salads. Therefore when [the new menu] rolls out in July, it will still have a side wedge salad. We feel comfortable in the fact that we've taken the right amount of testing,” Levin said.
BJ’s will launch another test later this year that trims the menu even more. Labor savings and faster table turns, Levin adds, should be a byproduct of this initiative.
The company is exploring additional opportunities for faster service as well, including mobile pay-at-the-table, which has led to about a 7-minute-to-10-minute quicker table turn than traditional pay. BJ’s is also making some changes to its server handheld tablets to take payment at the table and speed up the process. And, some BJ’s restaurants have tested a quick-service-like model, where guests can order at a counter when they walk in and then get seated.
“The ones that ordered at the counter during our test end up ordering another beer or dessert at the end and they still basically spent about an hour at BJ’s,” Levin said. “We want to be as efficient as we can with our table turns and give guests who want to be faster the ability to be faster, so we’ll continue to work on that. But at the same time, we want to make sure we’re doing everything we can to make sure they have a great experience.”
In fact, BJ’s is leaning hard on its “brewhouse theater” positioning to differentiate itself and provide an experiential environment.
“We know from our consumer research that guests come to BJ’s for an experiential dining experience,” Levin said, adding that this position should continue to contribute to positive momentum. “We intend to continue building sales into 2023 with demand for experiential dining remaining strong.”
Notably, the company is leveraging this momentum to target ambitious unit and sales growth goals. In 2022, the company hit $1.3 billion in total revenues and 216 locations in 29 states. Levin said there is an opportunity to double the number of domestic locations and grow BJ’s sales to $2 billion “and beyond.” So far this fiscal year, the company has opened two new restaurants and expects three more, and Levin said new restaurants have maintained average weekly sales approximately 20% higher than existing restaurants.
“We are focused on a comprehensive set of initiatives aimed at significantly increasing our average weekly sales, growing our restaurant margins and continuing our national expansion,” he said. “We are incredibly and increasingly confident that guests’ affinity for our concept, coupled with the trajectory of our business, and our current initiatives will enable us to achieve attractive near and midterm overall growth and margin objectives.”
Contact Alicia Kelso at [email protected]
