Wingstop exists online more than most of its fast-casual peer set.
During a time when other companies have noted loss of share to sit-down occasions, the chain saw digital sales account for a record 65.2 percent in the second quarter. CEO Michael Skipworth told investors Wednesday that off-premises comprises 94 to 95 percent of business and Wingstop is sitting on a digital database of 35 million users.
All of it was built without a loyalty program—an aspect that makes the wing brand quite unusual in the post-pandemic era. Several quick-service concepts have either rolled out a new rewards feature or enhanced an existing one during the past few years, including McDonald's, Jack in the Box, and Burger King. All of it for the purpose of attracting new users and increasing frequency and average check.
Meanwhile, Skipworth said Wingstop is making progress with its $50 million tech stack, which should allow it to better leverage first-party data, personalize the customer journey, and drive more digital expansion. However, he did hint some loyalty feature may come in the future.
"It could be a lever for us down the road as we aspire to digitize every transaction. We could engage with guests in some form of early access, maybe secret menu—some way to specialize the experience for guests that are signed up with the program with Wingstop," Skipworth said during the brand's Q2 earnings call.
Loyalty programs have proven valuable for other limited-service brands. MyMcDonald's Rewards, which came to the U.S. in July 2021, is now in more than 50 markets. Signups are in the high-single digits and digital mix is close to 40 percent in the chain's top six markets. Jack in the Box—a concept with a similarly sized footprint as Wingstop—released a new program in 2021 as well. Its digital sales grew from 1 percent pre-COVID to now roughly 12 percent.
READ MORE:
Wingstop Puts 'Foot on the Gas' and Doesn't Let Up
Wingstop Wins Big with Deflationary 2022
Wingstop's Unit Economics Keep Moving Upward
It could potentially be another source of fuel for a brand that saw 16.8 percent same-store sales growth in the second quarter. Substantially all of that was driven by transaction growth. Unit economics are near historic highs; initial costs to open a store are $450,000 while AUV has reached $1.7 million. Together, that leads to a payback period of less than two years for operators. Additionally, new locations are coming out strong. Restaurants opening last year have a starting AUV above $1.3 million.
So it's no surprise that Wingstop is having a record year across several unit growth metrics, like development agreement sales, site approvals, and new restaurant openings.
It's going so well that the fast casual decided to raise its 2023 guidance from 240 net new openings to 240-250 and from high-single-digit same-store sales growth to 10-12 percent. In the second quarter alone, the brand debuted a net of 50 stores. Among those was the 2,000th opening systemwide in April. As of July 1, there were 2,046 Wingstop restaurants in the world. This breaks down to 1,794 locations in the U.S. and 252 franchised outlets in international markets.
A majority of investment is coming from existing franchisees, and it's balanced between fortressed and non-fortressed markets. Wingstop noted earlier this year that its global development pipeline was nearing 1,200 restaurant commitments.
"There's a significant amount of demand and excitement from our brand partner community to continue to grow," Skipworth said. "We're seeing our pipeline of sold restaurant commitments for next year continue to build very nicely. And in addition to that, we continue to see a really strong steady flow of sites coming in to be approved, giving us a lot of confidence in continuing to be able to expand our footprint."
The apparent excitement comes from a consistent set of sales layers the brand has implemented over the past year. One is the chicken sandwich, a product that over-indexes in the lunch daypart and mixes in the mid-single digits. More importantly, the item is creating a halo effect where new users introduced to Wingstop via the chicken sandwich explore the rest of the menu. Operationally, it helps with the mix of boneless chicken and cutting long-term food costs to the low 30 percent range.
Another driver is the company's partnership with Uber Eats, which launched in July 2022. It's Wingstop's second national deal with a third-party aggregator, following DoorDash. Thus far, delivery has provided incremental visits and served as a greater avenue for building awareness. And this is without putting a lot of ad dollars toward pushing customers to the third-party platforms. The channel mixes 30 percent, but Skipworth said there's room to raise that total to 50 percent.
Then there's the national ad fund—fueled by $809.8 million in systemwide sales in the second quarter. Looking at a wider scope, system sales surged past $3 billion on a trailing 12-month basis through June; that's nearly double three years ago during the same time period. Wingstop is translating these dollars to premium commercial placements, particularly during live sports. The brand plans to launch a new creative campaign—its first in more than three years—during the start of football season.
Wingstop is targeting heavy quick-service users, a group of customers that represents more than 60 percent of all visits.
"These new guests that are coming into Wingstop tend to be Gen Z or millennials, multicultural, tech-forward, party size of two or more, and willing to spend a little more for quality or indulgent," Skipworth said.
The chain hit record highs in brand health metrics like awareness, purchase consideration, and intent, and media-related metrics such as positive buzz, word of mouth, and likelihood to recommend. Wingstop also scored high with value "in an environment where many brands are measuring decline," the CEO noted. The fast casual has moved on from significant menu price inflation thanks to a nearly 40 percent year-over-year decrease in the price of bone-in wings and its work to mitigate volatility in the supply chain.
"While we are encouraged by the progress we're making, we continue to see sustainable growth in front of us when we benchmark Wingstop's brand awareness to other national brands," Skipworth said. " ... In our 19 consecutive years of same-store sales growth, we have a proven playbook and a multi-year strategy that we are working in and continue to execute against. We believe our sales strategies provide us with clear line of sight to growing AUVs north of $2 million."
"loyalty" - Google News
August 03, 2023 at 06:55PM
https://ift.tt/avGn63h
Is a Loyalty Program in Wingstop's Future? - QSR magazine
"loyalty" - Google News
https://ift.tt/VGyWnQ5
https://ift.tt/t82UeRz
Bagikan Berita Ini
0 Response to "Is a Loyalty Program in Wingstop's Future? - QSR magazine"
Post a Comment