One of the keys to maintaining momentum will be optimization of the menu, Levin said. BJ’s wants to maintain its breadth—from fish ‘n’ chips to deep dish ziti—but focus on core items going forward. The chain’s chief brand and growth officer and head of culinary are completing a category-by-category analysis to achieve this goal.
Levin said the broad and differentiated menu gives BJ’s the ability to offer price points at all levels. The chain is leveraging this strategy to improve its lunch daypart, which weighed on two-year comps by three percentage points in Q4.
The restaurant is using introductory price points and pushing daily brewhouse specials to drive more customers toward the weekday lunch daypart, So far, tests of the lunch special have yielded more than a 600-basis-point improvement in traffic compared to a control group.
Additionally, instead of lowering portion sizes in the face of inflation, BJ’s is hoping to increase value of its meals by adding additional sauce to its chicken alfredo pasta, introducing a larger shareable pizza at a slightly higher price point, and increasing portions of its seafood taco offering.
“We kind of want to take a little bit of a different approach that we're seeing from other players out there using the term of inflation out there, maybe less wings or less size of something else,” Levin said. “We don't think that's the right strategy for BJ's. That's not what our guests are coming for.”
“So we're going to continue to develop a menu strategy that's going to allow a really good entry-level price point, but we have this ability to allow our guests to indulge things like our prime rib or our tri-tip or even like fish 'n' chips,” Levin continued. “And we're going to continue to create and craft menu items in that area that allows guests to up spend.”
Levin’s optimism is also grounded in what he described as a “very significant near- and long-term restaurant expansion opportunity.” BJ’s hopes to open as many as eight restaurants in 2022, but the number depends on timing of permits and receiving crucial equipment, like HVAC systems.
Eight restaurants would be about 4 percent unit growth. BJ’s goal is to exceed 5 percent in the future. The CEO said upcoming restaurants will be similar to the most recent prototype, with more of a focus on off-premises. Channels outside the four walls are still doubling pre-COVID levels.
“I think we can do [5 percent plus unit growth] with high quality,” Levin said. “I think you layer on top of that the ability to drive comp sales and then leverage the middle of the P&L, and I think that gets to a strong earnings cadence, going forward. This year, the reason we said as many as eight, and originally—we were talking eight to 10—is we are seeing a lot of challenges getting through the permitting and planning at a lot of communities.”
BJ’s also plans on launching a remodeling program later this year, including expanding table capacity and “solidifying our brewhouse authority,” according to Levin. The CEO said about one-third of the footprint—mostly the older models—has the ability to add up to 24 seats.
“Every time we know we've added capacity in restaurants, we're able to generate top-level sales,” Levin said. “We haven't defined the full-dollar scope yet on those, but knowing that we're adding capacity and getting seats in there, we know that they're going to have a high ROI just because, again, we're going to be able to generate top-line sales from them.”