Dave & Buster’s is selling VR as an attraction through a VR chip, both at its kiosk and register. Guests can also buy a chip if they come up to the attraction via point-of-sale devices.
Even before this product hits, Dave & Buster’s is already on the upswing. Amusement and other sales lifted 10.4 percent in the first quarter, while food and beverage sales collectively grew 7.7 percent. Amusement and other represented 57.9 percent of total revenues, a 60 basis-point increase from the prior-year period. Walk-in sales dropped 4.8 percent, special events business declined 6.4 percent. In terms of category comps, amusements fell 4 percent, while food and bar dipped 6.7 percent and 5 percent, respectively.
On the culinary side, the chain’s pared-down menu—about a 20 percent cut announced in February—is beginning to help Dave & Buster’s simplify kitchen processes, King added, and speed up service. It also remains on track to test a “quick-casual” offering inside Dave & Buster’s during the back half of the year. King said “we continue to view this as a complementary delivery mechanism to casual dining inside our facilities.”
“Improving service and reducing friction in the guest experience is also a strategic priority for us, and we're focusing our attention on pain points at the front desk, at our bars, in the dining room and while purchasing power cards and activating games,” he added. “A combination of technology and operating processes, including how we deploy our people, are key elements of this strategy.”
Development of 10 percent or more unit growth annually remains a key driver for Dave & Buster’s. Nine units have opened since 2018 began, and five are under construction. The six stores that opened in Q1 are: Rogers, Arkansas; Memphis, Tennessee; Wayne, New Jersey; Anchorage, Alaska (a new market for the brand); Madison, Wisconsin; and Rosemont, Illinois.
The Rogers store was Dave & Buster’s first in the 17,000 square-foot smaller format it outlined last December. The next is coming to Corpus Christi, Texas, later in the year. Dave & Buster’s expects average-unit volumes of $4–$4.5 million and store-level EBITDA margins of around 25 percent in these restaurants.
So far in the second quarter, Dave & Buster’s has opened in Salt Lake City—another new market; Massapequa, New York; and Torrance, California.
“Our target is to ultimately open or 231 to 251 locations in the U.S. and Canada, including 20 to 40 of the 17,000-square-foot stores,” King said. “We plan to capture market share through unit growth on a consistent measured pace and by driving improvement in our comp store sales.”
“We can win by focusing on enhancing our offering, strengthening our execution inside the box, and ensuring that we're reaching our audiences effectively,” he added.