About half of BJ’s restaurants are approaching pre-COVID staffing levels. / Photography: Shutterstock
The success of BJ’s Restaurants, like much of the industry, relies on staffing.
Certainly, several factors caused the casual food chain’s comparable store sales to fall 0.5% in the third quarter compared to two years ago. The burgeoning delta variant of COVID-19 has driven customers away during the summer, for example, and the company was already facing tough comparisons with a 2019 quarter that featured plenty of promotions.
But it was the lack of workers that really held the chain back, executives said on Thursday during the chain’s third-quarter earnings call. Short-staffed restaurants were forced to limit their menus and hours, which hampered sales. Meanwhile, stores that were more staffed saw positive comps.
“Staffing remains our # 1 opportunity to drive short-term sales growth,” said CEO Greg Levin, according to a transcript from financial services site Sentieo. “We continue to see a direct benefit for our compositions in restaurants with higher staff levels.”
Chain-wide, BJ’s restaurants have about 90% of pre-COVID levels. About half of its 212 restaurants are nearly full, and these generated a comparable store sales increase of more than 5% from 2019. Meanwhile, stores that lacked workers saw sales drop. single digit.
“Excluding these restaurants,” which make up about a quarter of the chain, “our comparable restaurant sales for the quarter would be single-digit positive,” Levin said.
Staffing levels tend to vary by market, Levin said. In Texas and California, BJ’s has more restaurants and more notoriety. Not only does this make hiring easier, but it also allows a location to borrow employees from a neighbor. Restaurants in newer markets cannot do this. But overall, he said, hiring tends to be positive.
“What we see differently is that we see people show up for interviews and then show up for their jobs on day one,” Levin said. “We didn’t really see that at the very beginning when the economy opened up.”
Levin pointed to both high-tech and old-fashioned initiatives to boost hiring and retention in the future. He touted the benefits of predictive planning along with culture, teamwork and employee appreciation. He also noted that BJ’s has changed its training material to make it easier for new employees.
“I’m not sure anyone has found the magic pill yet,” he said.
In other news for the quarter ended September 28:
- BJ’s is raising prices again to meet food costs. It will institute a 1.4% hike in the coming weeks, on top of a 2.5% increase in July. The chain’s reliance on high-quality meats makes it particularly sensitive to recent inflation: Food cost inflation for the quarter was 10%, executives said, mainly due to rising prices. price of ribs, prime rib, rib eye, three tips and salmon.
- Food and labor costs and lower sales contributed to lower restaurant operating margins. They were 11.2% for the quarter, down 230 basis points from 2019. “The # 1 way for BJs to protect and take advantage of margins is to improve our workforce,” said CFO Thomas Houdek to investors.
- BJ plans to open at least eight restaurants in 2022. Levin noted that the cost of building them has increased in recent years from around $ 5 million to $ 5.6 million or 5.8 million. dollars.
- In anticipation of the new restaurants, BJ’s has added the role of senior vice president of operations to directing day-to-day restaurant operations, freeing up the executive vice president of operations to focus on long-term strategy. BJ’s also hired someone to run their Beer Club membership program.