Dtc: Innovation? Now Restaurants Deliver Beer?

Posted: Jul 30, 2017

Source: Pexels.com

Facing weak sales, Buffalo Wild Wings Inc. is experimenting with beer delivery to help boost revenue.

The Minneapolis-based chain, which has about 15 restaurants in the Dayton region, is planning to pilot beer delivery in Ohio and Wisconsin and later this year expand delivery options through its mobile app, said President and CEO Sally Smith in a transcript of an earnings call Wednesday morning.

Same-store sales at Buffalo Wild Wings Inc. (NASDAQ: BWLD) slumped 1.2 percent at corporate locations in the second quarter.

This comes at a time when chain casual restaurants are struggling to compete with the rise of cheaper fast-casual brands, as well as rising interest in eating local and a highly competitive restaurant scene with lots of options but stagnant spending. Additionally, the cost of chicken has been spiking and putting pressure on the chain, according to Nation's Restaurant News.

The roll-out of beer delivery in Ohio could help the company reach new customers, but delivery is also "a double-edged sword," the restaurant industry publication wrote.

"While delivery provides the companies opportunities to reach guests in search of convenience, such customers don’t order the higher margin beverages. That’s tough for a chain like Buffalo Wild Wings that has built its business in large part on alcohol sales," according to its report.

The company is also adding a new format that's more geared toward takeout and delivery called "B-Dubs Express" that's a 2,800-square-foot, 50-seat store with a smaller menu. ( Note: Click the photo for a gallery of pictures inside the first B-Dubs Express.)

"We'll learn more about the flexibility and opportunity that B-Dubs Express gives us as we seek to penetrate higher density markets where the millennial population is moving," Smith said.

Additionally, the company has been growing its loyalty program, which has 2.5 million members. Loyalty programs are a traditional method for chains to gather more information on their customers to then use for targeted sales. Smith said the program will help the company understand "frequency, brand preferences and develop more targeted marketing programs."

Jul 27, 2017
Source: www.bizjournals.com

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