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BJ's Rides a Red-Hot Year to Long-Term Success

We thought you’d like to know how BJ’s plans to keep their sales soaring this year. Can the 202-unit chain keep it up in 2019?

Photo Courtesy of FSR Magazine.

There’s no denying BJ’s Restaurants had a banner run in 2018.

In fact, over the past five years, BJ’s has outpaced the casual-dining industry in traffic and sales by an average of about 100 basis points, according to Black Box data.

The graph below illustrates how BJ’s comp sales have progressed over the past five years.

Thanks to five openings in 2018, the chain’s revenue rose 8.3 percent. Traffic was up 1.6 percent, which beat BJ’s competition by about 270 basis points as the brand achieved its fifth straight quarter of positive guest counts.

Even more, BJ’s plans to contribute nearly $300 million in annual sales this coming year as new openings join the base.

Broken down, here’s what 2018 looked like in same-store sales:

Q4: 4.5 percent

Q3: 6.9 percent

Q2: 4.2 percent

Q1: 1.6 percent

It’s worth noting that Q4 stacked on a positive 1.6 percent quarter in 2017, showing consistency in BJ’s momentum. The previous six quarters were all negative.

This past quarter did show some deceleration compared to previous periods in 2018. This was to be expected, though, as BJ’s lapped key growth initiatives, like delivery, slow-roasted menu, and operational efficiencies such as server tablets.

In Q4, BJ’s was able to drive restaurant-level operating margin up 50 basis points to 17.2 percent and lift overall operating margin 90 basis points to 5.1 percent, surging profits.

The chain’s daily Brewhouse Specials and Happy Hour offerings continue to drive traffic. In 2019, it’s actually adding slow roast pork and tri-tip sirloin items to the Brewhouse Specials, which embed everyday value into BJ’s core menu.

BJ’s will continue to disproportionately protect its lower price-point offerings in 2019 and use its broad menu to implement nominal pricing. All without sacrificing the fundamental value appeal guests expect.

BJ’s introduced zucchini noodles, or Zoodles, to its EnLIGHTenment entrees geared toward health-conscious guests. On the other side, the slow-roast lineup tracks indulgent and higher on the price bar. BJ’s is adding a tri-tip sirloin entrée in March.

BJ’s would rather invest in its current everyday value elements, like the Happy Hour and Brewhouse Specials, than run promotional programs or deeper discounts.

One of BJ’s priorities for 2018 is to implement improvements to the physical organization of its kitchens, along with some back-of-house labor responsibilities.

The chain saw about a 4.5 percent increase in average hourly wages in Q4.

They are hoping that by making this a priority, it will help reduce overtime and keep wage inflation lined up.

BJ’s turnover rates were actually a bit lower in 2018 versus 2017 and they don’t want to cut hours.

BJ’s opened just five restaurants in 2018, but expects to open as many as nine in 2019.

Off-premises sales in 2017 were about 5 percent (entirely take-out). Today, BJ’s is at 9.5 percent.

BJ’s remains under-penetrated compared to the industry in off-premises, even with the growth, particularly in large-party occasions.

They are counting dollars, not percentages - and the incremental dollars help leverage a lot of our fixed infrastructure costs already invested in the business and in their G&A and they think it’s a great way to keep growing their business.

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