This is part of the Nation’s Restaurant News annual Top 100 report, a proprietary ranking of the foodservice industry’s largest restaurant chains and parent companies.
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In the increasingly competitive Casual-Dining segment, Dave & Buster’s systemwide sales growth of 16.3 percent was a shining beacon.
The Dallas-based big-box entertainment chain enjoyed strong traffic from Millennials driven by social occasions, families with children and corporate parties. Domestic systemwide sales growth was rivaled only by Texas Roadhouse, which rose 12.8 percent, and Buffalo Wild Wings, which grew 10.5 percent.
Dave & Buster’s, whose units range from 25,000 square feet to more than 40,000 square feet, found room for growth in shopping malls, which saw big-box retailers close and which were expanding their efforts with culinary-inspired concepts.
In the Latest Year, Dave & Buster’s added eight units. It ended its fiscal year in January with 80 units, an increase from 72 locations the Preceding Year.
The large unit footprint was reflected in the sales totals. Average estimated sales per unit in Casual Dining for the Latest Year was $4.4 million. But Dave & Buster’s led the pack with ESPU of $11.3 million.
Keys to growth:
Expanding Millennial appeal. Dave & Buster’s has benefited from the expanding purchasing power of Millennial customers. “From a guest-target perspective, our emphasis remains on play-together young adults, from 21 to 39 years old,” Dolf Berle, Dave & Buster’s president and chief operating officer, told analysts after releasing record-setting 2015 earnings. Dave & Buster’s appeals to that core demographic because of its amusements and food and beverage. “They also have a passion for sports viewing in a social setting,” Berle said, adding that they “are very attracted to new experiences and new sensations” provided in Dave & Buster’s tailored arcades and televised-sports viewing areas.
Emphasis on new games and good news. Besides Millennials, Dave & Buster’s also works on its appeal to secondary demographics of families with children for walk-in traffic and corporate parties for business events. Berle said the company works to keep its newness fresh for returning business by changing and promoting games and menu items. The brand makes “at least three launches per year of new games, new food and new drinks that are all marketed on national TV and complemented with a limited time offer to build excitement and a call to action,” he said.
Availability of big-box real estate. Dave & Buster’s is finding that the real estate market is offering more sites that fit its large footprint. “Given what's going on with some of the department store brands and big-box retailers, there is a lot of real estate becoming available in markets to meet our criteria,” said Stephen King, Dave & Buster’s CEO, in a recent earnings call. “And while others are having challenges at their mall locations, our mall stores are performing quite well. So as landlords and developers pivot toward more entertainment options versus traditional fashion retail and mall, we are in a good position to capitalize on these opportunities.”
Contact Ron Ruggless at [email protected]
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