Here’s why the slow-roast note is so crucial. There are a lot of ways to accelerate comps—heavy discounting, trimming a system by removing low-performing stores, taking price into the menu, etc. Adding slow-roasting ovens and pushing a restaurant’s menu into more premium territory isn’t typically one of them. That was one of those long-term flips, from a capital, training, and execution perspective, BJ’s needed to hit on. And it surely appears the 202-unit chain found pay dirt.
In Q2 of 2017, BJ’s completed the rollout of the new equipment associated with slow-roast entrees. The transition, disruption, and expense, along with start-up costs and operating inefficiencies, resulted in additional investments in labor and cost of sales.
Turn back to October 2017. BJ’s walked into its Q3 earnings with five straight quarters of declining same-store sales. Its stock hit a three-year low in September. Then Hurricanes Harvey and Irma landed, erasing 103 operating days and costing BJ’s $2.6 million in lost sales and direct costs, like food spoilage. Comps dropped 1.7 percent to make it six straight negative periods.
The Motley Fool called this an inflection point for BJ’s. Mainly, it was the crossroads in BJ’s performance where those broad changes started to weigh in. Not just slow-roast ovens, either. BJ’s invested heavy in handheld server tablets and delivery. To that point, there was no real way to know whether or not these operational fixes would strike a chord or fall flat. BJ’s employees had to master advanced cooking methods and become skilled in taking orders on the new devices. Management said at the time BJ’s was investing in value and customer traffic, and trying to drive its business for the long-term, and knew it wasn’t going to get margins back “right this minute.”
Fast-forward and BJ’s stock has since doubled, give or take. The 6.9 percent same-store sales mark, according to management, smashed sector averages by a full 5 percentage points. It outpaced Knapp-Track and Black Box by more than 500 basis points. Traffic growth of 2.6 percent topped peers by 3 percent.
You could break apart this run in a few pieces. Perhaps none more critical than guest satisfaction.
The handheld tablets greatly improved the time for a guest’s first drink or food item, CEO Greg Trojan said in BJ’s Q3 call. The order times improved customer experience “quite significantly.” Incidents of beverages, desserts, and appetizers also climbed. What the tablets didn’t really accomplish was speeding up table turns. While BJ’s would like to see that happen, the fact it hasn’t speaks to a larger success story playing out. “It just seems like the guest wants to have a social dining experience in our restaurant,” Trojan said.
The tablets have helped the loyalty program as well. Handhelds make it easier for guests and servers to exchange information. BJ’s upgraded Premier Rewards Plus loyalty program launched at all restaurants in February. The platform simplified BJ’s reward structure (guests earn points at a rate of 1 point for each $1 spent on food and beverages). It resulted in an increase in loyalty guests, both in signups and the percent of checks, the company said, which is helping stabilize traffic.