More than 50 dining rooms have reopened, with 14 more coming next week.

After seeing same-store sales drop as low as 82 percent in the fourth week of March, BJ’s Restaurants expects matters to improve as dining rooms reopen and off-premises sales continually increase.

Before the COVID-19 pandemic, off-premises accounted for 10 percent of revenue, or about $11,00 per restaurant per year. In the week ending March 24, when comp sales plummeted 82 percent year-over-year, the weekly average grew to $21,300. In the week ending May 5, the company is now down 67.6 percent, with off-premises sales at $34,900, or more than 200 percent above pre-COVID-19 levels. About 70 percent of the increase is coming from takeout, while delivery accounts for 30 percent.

BJ’s is hoping sales will rise even higher with 55 reopened dining rooms in Texas, Florida, Tennessee, Oklahoma, and Kansas. Fourteen restaurants across Indiana, Arizona, and Arkansas are scheduled to reopen dining rooms next week. Although many operators have shown concern with employees favoring enhanced unemployment benefits over returning to work, CEO Greg Trojan said BJ’s hasn’t had any issues as dining rooms reopened. 

“Our dining rooms are typically larger than our competitors, and we have less 6-foot seating than most, as well,” Trojan said during the company’s Q1 review. “Both are nice advantages, enabling us to provide a safe environment for a large number of guests. The great news is, as we expected, guests are eager to get back out to a social dining experience, and they are doing so in a manner that respects the prudent safety protocols these times demand.”

Here’s how average weekly off-premises sales and same-store sales have trended:

  • Week ending March 17: $11,402; ­–34.3 percent
  • Week ending March 24: $19,458; –81.7 percent
  • Week ending March 31: $21,563; –81 percent
  • Week ending April 7: $24,667; –77.5 percent
  • Week ending April 14: $27,981; –74.8 percent
  • Week ending April 21: $31,716; –70.9 percent
  • Week ending April 28: $30,582; –72.9 percent
  • Week ending May 5: $34,921; –67.6 percent

The company attributed the growth in off-premises sales to a rise in traffic and increase in average check due to the Family Feast offerings, take-home entrees, and to-go alcoholic beverage sales. BJ’s has lifted sales despite reducing their menu from 145 items to around 85.

In the first eight weeks of the quarter, comps were up 1.5 percent, but with the effects of the pandemic, BJ’s finished Q1 down 15.5 percent. The brand’s last day with positive comps was March 1. Same-store sales dropped 40 percent in March year-over-year. First-quarter revenues dropped 12.4 percent to $254.6 million.

Through the pandemic, only four of the company’s 209 restaurants closed. The company expected to open eight units this year, but those plans were scrapped. One opened in Q1, and another near completion is expected to open later this year. All other openings have either been canceled or delayed.

Trojan explained that comps have been down more than the brand’s full-service competitors because of the absence of late-night business, which can’t be replaced with takeout and delivery. CFO Greg Levin said that if you don’t factor in the loss of late-night business, comps are down in the 43 percent to 45 percent range in the past week and a half.

Trojan noted that so far, the brand hasn’t seen any cannibalization between dine-in and off-premises sales. He reported that off-premises sales are actually higher compared to the same days three weeks before dining rooms reopened.

“And remember, these off-premise sales that we’re maintaining or growing are roughly three times higher than our off-premise sales at the start of the year,” Trojan said. “So we believe the dine-in and off-premise sales are largely independent, at least in this current environment. … Time will tell, but we’re hopeful that guests that have now enjoyed the convenience of takeout and delivery from BJ’s will continue to do so in addition to dining onsite well after this crisis has passed.”

At stores where dining rooms have reopened, units are taking reservations by phone and through the website and app. Hosts meet customers outside in the entryway. The employees utilize mobile waitlist management devices and text messages to let customers know when they can be seated.

BJ’s is encouraging consumers to download menus from their phone via a link sent through text, QR codes, and website-landing pages. Trojan said customers are adopting the new format, which improves speed and safety.

At current management staffing levels, which is fewer than five managers per restaurant, average weekly sales need to reach $65,000 to return to positive cash flow. Texas reopened dining rooms May 1 at 25 percent of capacity, and Trojan said dine-in sales in the state are adding about $20,500 in additional weekly sales.

“As more dining rooms reopen, permitted capacities grow and we expand our menu closer to our pre-COVID offerings, we can see a clear path to reaching this next milestone in the near-term and continuing to grow well beyond it,” Trojan said.

In an effort to improve its financial position, BJ’s announced May 1 that it received a $70 million investment from Act III Holdings, which is owned by Panera Bread founder and former CEO Ron Shaich. The chain has $134 million in cash on its balance sheet, and is burning about $2.5 million per week.

“The path of growing off-premise that drove so much growth at Panera’s overlaps a great opportunity for our concept as well, and we look forward to tapping into that knowledge and experience in other elements, as well,” Trojan said.

The company laid off 16,000 of its 21,000 hourly employees, 200 restaurant managers, and 40 Restaurant Support Center employees during the pandemic. Trojan and other leaders took a 20 percent pay cut and Restaurant Support employees making over $100,000 had their salary reduced.

Once normal operations resume, Trojan said BJ’s will continue to march toward its goal of operating at least 425 units. He also indicated that if the company can maintain a certain level of off-premises sales, it may encourage the chain to invest in expanded takeout areas and different kitchen layouts to support the volume.

Casual Dining, Chain Restaurants, Feature, BJ's Restaurants