Moving forward, BJ’s hopes to incrementally lift sales even higher with its beer subscription program. The beer club is being tested in eight of BJ’s Sacramento stores. Trojan said members are engaged, increasing their visits to BJ’s, and utilizing certain benefits. For example, members have the ability to refill a growler for $5. And when they do, more than half are buying food again to go along with it.
The program’s pipeline includes Bourbon Barrel Chocolate Stout and Coffee Blonde, which received the bronze medal at the Great American Beer Festival. The brand expects to launch the beer club in most of the California restaurants in the next couple of months. It’s also evaluating expansion into other states later this year.
Because of differing alcohol laws, BJ’s is limited as to where it can implement the program. CFO Greg Levin estimated it could reach 70 percent of restaurants currently. If other states open up, that number could become higher.
“So we like what we're seeing in terms of overall activity,” Trojan says. “We want people sort of like the health club business. We want people to use the health club and get on the treadmill. We want people to take advantage of these offers because we want them to stay members, right? So again, I say all of this with like super caveat. We’re in eight restaurants in weeks, not years or months.”
Looking toward the future, BJ’s is committed to opening stores in Merrillville, Indiana, and Lansing, Michigan, which were under construction at the beginning of the pandemic. Trojan said the real estate team is working to build a pipeline for 2022 and beyond, but he noted the company is being cautious about not agreeing to new leases until there’s more clarity in the environment.
The CEO said for years, people have asked why BJ’s unit development isn’t faster. Each time, he responds by saying the brand prefers to open with quality as opposed to quantity. To Trojan’s point, Levin said the floodgates haven’t opened yet in terms of good real estate, as so many had predicted earlier in the pandemic.
Levin added if BJ’s targeted B and C sites, it could very well ramp up to 15 to 20 stores per year. But that’s not the company’s growth strategy.
“That's been a hallmark of BJ’s,” Levin said. “We have not had to close a restaurant because of performance in that regard. And even now, even though we're taking some impairment on restaurants, we've had to do that mainly because around COVID and the accounting rules versus where those restaurants were operating a year ago. So again, we've always been quality first, and we'll continue with that. But at the same time, we're going to be opportunistic when those availability of new sites come about.”
Regarding the $15 minimum wage debate, Trojan estimated fewer than 50 percent of restaurants would be impacted in the first couple of years of a gradual increase because many stores are already significantly above the current federal minimum wage of $7.25.
He said BJ’s is more concerned about the labor pool. He noted it’s somewhat challenging to get team members to come back into restaurants. Trojan attributed some of that to workers moving to new industries and some to employees not feeling safe enough. However, he does expect the labor market to be better than the industry has seen in the past two years as vaccinations continue.
Trojan added BJ’s will always invest in technology, but it will never sacrifice service and hospitality.
“So I wouldn't be sitting here trying to build a model on your end and saying, ‘OK, with wages going up, BJ's will take servers from three, four table stations to eight, nine, 10 table stations,’” Trojan said. “… That’s not how we're going to grow top-line sales, which is ultimately the best way to manage labor. So we're going to take more of that authentic approach, but we'll always invest in technology.
“If we know what our sales are each week, we can drive really or manage really good labor,” he continued. “The challenge that we've seen through COVID is those schedules go up and down each week. But when there's predictability in our business, we'll get leverage in that, and that's what we need to do, and we'll continue to invest on that aspect of it.”