“These efforts will create more brand buzz, more satisfied and loyal guests, and should ultimately yield even higher sales volume,” Hilario said. “We will be communicating these enhancements with consistent messaging through an influencer based social media strategy that sells the new Kona Grill story.”
Influencer-driven marketing is another staple of STK’s success, often considered a celebrity hotpot in its eight markets (Atlanta, Chicago, Las Vegas, LA, Nashville, NYC, San Diego, and Orlando). The concept melds a modern steakhouse with a chic lounge experience. It emphasizes the social experience and features a disc jockey at every location, “destined to encourage guests to interact and mingle,” the company’s website notes.
Kona Grill unveiled a more robust happy hour experience last November, extending hours from 2 to 7 p.m. during the week, and 9 p.m. to close on Saturdays. The deals ran all day Sunday, too. Kona Grill introduced 20 craft cocktails and wine (for $5) and brought back margaritas.
It wasn’t so much a pivot down a new path as it was a refresher course on how Kona Grill rose to prominence. The chain doubled in size from 23 restaurants in 2012 to 46 by 2017. From 2012–2015, with Berke Bakay at the helm, Kona Grill’s stock more than quadrupled.
But by the time the brand neared bankruptcy, its same-store sales had dropped 12.3 percent in 2018 after declining 5.9 percent in 2017. This after six consecutive years of comparable increases.
Revenue fell 12.4 percent in the fiscal year that ended December 31, year-over-year. The company also swung a net loss of $31.698 million in 2018 compared to $23.432 million in the previous year. Average-unit volumes decreased to $3.492 million from $4.119 million and EBITDA was negative $15.9 million.
It was a precipitous drop and sent leadership searching for Kona Grill’s core equities. Happy hour sat atop that target.
Last fall, the company said it was set on becoming “America’s best happy hour,” and wanted to reignite its former standing as a lively, patio-centric experience that carried traffic from happy hour into multiple occasions—just as Hilario referenced.
“… the board’s directive is to revitalize the Kona Grill brand with what has made us successful over the years,” then-CEO Marcus Jundt said. “These areas include becoming once again America’s best happy hour with items that provide a great value proposition without significantly impacting gross margin.”
The early goal—another STK wheelhouse trait—elevate its menu so that every plate or cocktail is “Instagram level.”