The basic rules of baking say to do your research, read the recipe, check your ingredients, and make accurate measurements. The Cheesecake Factory is following that same process so far in its approach to launching a new loyalty program, slated to go live nationally mid-year, according to David Gordon, Cheesecake Factory president. The casual-dining restaurant makes all 235 menu items from scratch daily, plus produces more than 60 cheesecakes and other baked desserts.
“We purposefully have taken a very measured and deliberate approach in designing Cheesecake Rewards to ensure it is consistent with our marketing strategy while targeting our desired financial objective of driving profitable sales growth,” Gordon told investors on a first-quarter earnings call. The company is likely to debut the new program nationwide in June, executives said.
Cheesecake Rewards will have three components: Published offers, like access to reservations and a complimentary slice of cheesecake on members’ birthdays; unpublished offers given throughout the year to drive incremental visits; and “key marketable moments” around National Cheesecake Day and other treat promotions around holidays like Halloween, Gordon said. Surprise and delight will be the main focus, and the program won’t be based on points or spend.
“We do know that access to reservations is an important component for people at Cheesecake Factory. We’ve historically been known for our long waits, and we think that’s a benefit that will certainly drive acquisition,” he added.
The overarching goal to leverage data analytics and insights to drive incremental sales—with another goal to make sure the program doesn’t cut into restaurant-level margins. A pilot of the rewards program initially launched last June in Houston, followed by a second pilot launch in Chicago last November. “We’ve had strong operational execution, and as a result, have accomplished our pilot goals, with our acquisitions and member activity rates exceeding our expectations,” Gordon noted.
“And hopefully, we’ll be gathering enough data to be able to market specifically to guests to drive perhaps different time periods. So if you’re only coming for lunch, we can talk to you and make sure that we offer you something and one of those marketable moments around dinner,” he added. “So we’re excited to get started in June and use that data in a way that we haven’t been able to before since we never had a traditional CRM program.”
Same-store sales at the Calabasas Hills, California-based company rose 5.7 percent in Q1 year-over-year, despite record rainfall impacting sales in California, its largest market—demonstrating the strength and resilience of The Cheesecake Factory’s broader portfolio, David Overton, Cheesecake Factory CEO, told investors. First quarter revenues reached $866.1 million, a 9.1 percent increase over last year.
Meanwhile, North Italia same-store sales increased 9 percent year-over-year and 30 percent versus 2019.
“We delivered positive first quarter comparable sales growth across all of our concepts. The extensive and growing appeal of our differentiated concept supports our belief that we are uniquely well positioned to capitalize on the continued favorable consumer demand for experiential dining,” Overton said.
The Cheesecake Factory has 33 restaurants in 13 states and Washington, D.C., and plans to open five to six stores in 2023 domestically. With an average check hovering between $30 and $40 and a 25 percent alcohol mix, The Cheesecake Factory is well positioned to take a larger slice of the pie in the casual dining segment, and executives highlighted white space for 200 domestic stores over time.
During Q1, the company opened two new restaurants—a Doughbird in Nashville, Tennessee, and a Flower Child in Tucson, Arizona.
And while supply chain challenges continue to cause opening delays across the entire industry, the company expects to open up to 22 new restaurants in fiscal year 2023, including five to six Cheesecake Factory domestic locations and two or three international stores, five to six North Italia stores, and 10 Fox Restaurant Concepts units, including three or four Flower Child Locations.