BJ's to launch mobile ordering, payment

BJ’s Restaurants Inc. is planning a new mobile program that will allow diners to order ahead and also pay at the table using their smartphones — part of a larger effort to help turn around dwindling sales.

Same-store sales for the chain dipped 2.7 percent in the fourth quarter as a result of a 2.3-percent decline in traffic. Officials blamed the combined impact of bad weather, the shorter holiday season, and ongoing macroeconomic headwinds that have plagued the casual-dining sector in general.

In a conference call with Wall Street analyst, however, BJ’s president and chief executive Greg Trojan focused on the chain’s future and efforts to re-ignite sales and generate new traffic.

For several months, the chain has been testing mobile payment with loyalty members, and, during the second half of the year, BJ’s will launch a mobile ordering program that will allow guests to use their smartphones, tablets or desktop devices to order their meals before they come to the restaurant or while they wait for a table.

As the fast-casual segment continues to chip away at casual-dining market share, BJ’s goal is to add the competitive advantage of “speed when you want it,” said Trojan.

The chain aims to improve the customer experience and remove the “two pain points” that can slow service: guests being able to order and pay when they’re ready, said Trojan. “It will clearly help us compete for occasions we might not have been considered for before because of the time it takes to dine with us,” he said. “We’ve never been particularly fast, so speed is the right objective here competitively.”

While consumers may need time to get used to mobile ordering and payment, the benefit in terms of service speed and table turns is clear, he said. “We know, used together, they can reduce an hour dining experience to a comfortable 35 to 40 minutes, without even feeling rushed.”

Trojan calls the move “casual fast,” saying it will be a key tool in the chain’s arsenal as it attempts to stand out from the casual-dining crowd.

Other casual-dining chains are also adding new technology this year, including both Applebee’s and Chili’s, which are rolling out the use of tabletop tablets for ordering and paying.

Trojan said allowing guests to use their own devices at BJ’s will eliminate the need to make the capital investment in hardware that might quickly become obsolete.

Mobile ordering is also moving into fashion in the quick-service world, with Taco Bell rolling out an app later this year that will allow guests to order ahead. But BJ’s will be one of the first in the casual-dining world to give guests that option.

The disadvantage with being first to debut such functionality with mobile devices is that guests may be slow to see the benefits, said Trojan. “Even with mobile pay, what we’re finding in the early days is that people don’t understand that they can pay anytime, even right after they’re done ordering,” he said. “You don’t have to wait for a server to give you anything.”

Millennials, however, seem to take immediately to the technology, and Trojan predicted older guests will catch on in time.

Streamlining the menu

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Also part of its plan to boost sales, BJ’s will roll out a new menu next week that includes more items for the “increasing number of calorie- and health-conscious guests,” said Trojan.

The new menu also features more items under $10 with bolder flavors, smaller portions and lower-calorie options. Trojan noted a kale and Brussels sprout salad for $9.50, for example, and Mediterranean chicken pita tacos with Greek yogurt crema for $8.95.

The rollout will be supported by a media campaign, set to launch in March, that will include print, digital, social media and television. Trojan said the media effort will bring “a new level of storytelling” to increase brand awareness for the casual-dining chain.

The chain is also addressing service speed with its menu changes. Over the past year, BJ’s slowed its new product pipeline to focus on improving food quality and reducing the complexity of the menu. Rather than the 160-165 items on the menu previously, the new menu set to roll out next week will have about 135 items, even with the new additions, Trojan said.

Last year, the chain launched a new Brewhouse Burger line that Trojan described as a hit with guests. The line is already selling at almost half the rate of all the chain’s signature pizzas combined.

The burgers were designed to beef up the mid-priced menu category with a starting price of $6.95, but the lower-cost items put pressure on BJ’s average check, which declined 0.4 percent during the quarter.

Still, said Trojan, “It’s an investment worth making as we seek to drive traffic.

BJ’s reported on Wednesday a 93-percent decline in fourth quarter net income. The results were dampened in part by one-time charges, including separation costs associated with the departure of the chain’s chief marketing officer, Matt Hood, and write-downs related to an underperforming unit in Texas.

The company did not respond to questions about Hood’s departure.

In addition, the chain incurred settlement costs after the Alcoholic Beverage Commission in Texas determined the company’s system of supplying beer from out-of-state brewery units didn’t meet code. In the settlement, BJ’s agreed to start brewing beer locally for those restaurants, which will start in 2015.

BJ’s plans to open 15 new restaurants in 2014, but Trojan left room to change that plan if the macroeconomic climate remains as choppy and volatile as it has been.

Contact Lisa Jennings at [email protected].
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