EVP and CFO Matt Clark said the brand’s variety allowed it to target dayparts in ways many competitors couldn't. It can market and drive awareness to burgers, for instance, to trigger a lunch occasion generally dominated by counter service. “People realize that the value premise there costs the same as if you go to a fast casual, right?” he said.
In Q4, Cheesecake Factory took a second run at its $15 lunch special, which includes a slice of cheesecake. Gordon said the campaign drove higher incremental sales attachment compared to the September go-around, increased lunch awareness, and pushed sales to late afternoon shoulder periods.
On value, simply having such a large menu gives Cheesecake Factory opportunity to present a wide range of price points—something Gordon stressed the importance of in markets where wage pressure continues to ratchet up. “So even as we're taking more price maybe in California or in the state of Washington or in the city of San Francisco, you can still get great value across the menu, whether you want to spend $31 or you still want to spend $12.95 or $13.95 and get a hamburger or a sandwich or a salad,” he said “The breadth of the menu gives us a competitive advantage from a pricing perspective as well.”
With the scope of price points and sheer size, Gordon says families can order “easily one, two or three times a week.” And if they would rather indulge less frequently, they can piece together something for everyone, for however much they want to spend.
“If you're going to do continued strong sales in off-premises, you can't disappoint guests. You have to get it right the first time,” he said.
Gordon doesn’t see any reason why off-premises gains won’t stick down the line, at least to some elevated degree compared to pre-virus life. He often references his parents as a case study. They never ordered to-go food before and now do so all the time. They had to trial it when dining rooms shut down. Once through the door, however, they realized the convenience. “And along with continuing to go out to eat, I think they’re going to be more included to continue to order to-go once things get back to ‘normal,’” Gordon said.
Cheesecake Factory restaurants today, even those at 75 percent capacity with short wait times throughout the week, are maintaining healthy off-premises gains. What this signals to Gordon is a broader shift that’s nothing new to Cheesecake Factory. Something it tried to address in February 2020, on the doorstep of COVID, when it started taking reservations for the first time. People are pressed for time and will be after the pandemic clears. They’re going to seek convenience when they’re not valuing experience. “And a lot of the technology that has enabled off-premises to be executed in a much more seamless way for guests, I think is what's changing a lot of that behavior and will continue to be changing that behavior,” he added.
“[Consumers are] going to have still two people working at a household, and so some of those behaviors they've learned, I don't see any reason why they won't stick,” Gordon said. “And I think that those brands that execute well and have a great offering, will be the ones where perhaps an additional occasion, along with coming to dine-in and additional occasion at home, will continue to be part of the course.”
With delivery, Cheesecake Factory saw order rates twice its historical average for on-premises guests. Clark called that “two times the level,” frequency “pretty strong.”
Of Cheesecake Factory’s 43 percent off-premises mix in Q4, delivery accounted for 40 percent, online ordering 30 percent, and phone/walk-in the other 30 percent.
