5 ways The Cheesecake Factory is going against the trends
A typical branch of The Cheesecake Factory generated 7% more sales in the first 27 days of April than in the same period of 2019, while the sister concept North Italia generated an 8% increase in sales. compositions.
Those numbers may be similar to the same-store sales that competing casual chains posted for the start of the second quarter, but the refined-casual pair of concepts stood out in a number of ways. The leaders of the parent company of the brands could just as easily have asked themselves these questions:
What work crisis?
According to parent company founder and CEO David Overton, employee retention for the Cheesecake brand was higher in the first quarter than the chain had seen in the pre-pandemic times.
And it’s not as if recruiting has been walking barefoot on broken glass than it is for other operators, President David Gordon has suggested. “We are 96% of the workforce before COVID,” he told financial analysts on Wednesday. “So I don’t think we have as much catching up to do as there are competitors in our space.”
He cited Cheesecake culture as the main reason for the chain’s experiments to attract and retain staff members, without listing the key attributes. But Gordon added that the company has invested in sophisticated analytical tools to determine the salaries that turn candidates’ heads in a given market. “We have always paid a competitive salary,” he said.
Gordon also pointed out that Cheesecake decided at the start of the pandemic to keep all of its managers despite the closure of dining rooms and a rapid drop in sales.
What is the decline in offsite business?
About 60% of the Cheesecake-brand chain-wide seats are back in use, the result of the easing of on-site dining restrictions in a number of states. Many full-service chains have reported an erosion in their take-out and delivery sales as customers choose to dine again.
But Cheesecake said during its analyst call that offsite sales may have increased as seats and tables were brought back into service. One analyst specifically asked if this was indeed the case, but did not get a direct response from executives.
“For us, the point is, it’s been extremely consistent,” CFO Matt Clark said of the company’s offsite operations. On an annualized basis, “We were right around that $ 4 million per unit mark” during the first 27 days of April.
This compares to a pre-COVID volume of around $ 1.8 million per unit.
However, they allowed the percentage of total unit sales generated by takeout and delivery to rise from 43% to around 33%, as total store revenues climbed. At the rates recorded in April, average unit volumes would reach $ 11.6 million on an annualized basis.
What inflationary concerns?
Chains of all kinds have recently expressed concerns about a possible rise in food prices. As competition for labor is also likely to drive up costs and drive up menu prices, inflation is emerging as a major concern.
Cheesecake expects the costs of its products to increase by about 2%, with prices locked in for about 75% of its supplies, Clark said.
What loss of additional sales?
It’s practically a gospel that restaurant patrons aren’t as likely to order dessert to go or deliver as when they dine there. This is not true for Cheesecake, said Gordon. Desserts are as likely to be included in a take out order as they are in a catering tab.
What a slump in the middle of the week?
Cheesecake’s busiest selling season is arguably the Friday dinner to Sunday brunch time, executives said on the analyst call. When a jurisdiction eases restrictions on dining room capacity, that’s when a cheesecake is likely to feel the benefits of putting more seats to use, they explained.
But there have been surprising changes in the brand’s dining habits, according to Clark. “The greatest growth we have had per time slot is [in] mid-afternoon, ”he said. “Lunch is actually a bit stronger than dinner.
He added, “From a comp perspective, we’re seeing a disproportionate proportion mid-week.”