Photo: By Bob B. Brown on Flickr
Buffalo Wild Wings is testing out a whole new pricing system for its wings. Chicken wing prices are at a record high and they’re cutting into the chain’s profits.
The chain currently buys them from suppliers by the pound, then sells them to the consumer in fixed numbers of wings.
The new method downplays the actual number of wings in each order. Instead, it presents variable-size portions based on weight.
“I think that it’s important for, and this is the harder part to communicate, is that because the wing sizes have gotten so much larger, five wings yields more ounces of chicken than six used to,” said CEO Sally Smith on the company’s Q4 earnings call with analysts. “So the guest I think is seeing a value in additional protein, I guess. It is – it probably does take a little bit getting used to if we’re consistently serving five.”
The move is essentially a price increase, noted Goldman Sachs analyst Michael Kelter on the call.
“But it’s probably a more conspicuous price increase than any other you could take because it does change the way the consumer interacts with the concept,” said Kelter.
The new system is in place in 64 Buffalo Wild Wings locations and it includes both company-owned and franchised restaurants.
How is the test going so far?
Well, it’s still being tweaked. Buffalo Wild Wings is still having trouble figuring out the right portion sizes.
Smith explained on the company’s Q4 earnings call with analysts — helpfully transcribed by Seeking Alpha:
“We have been testing different ounces of meat in let’s say the single, double, of wings in the single, double and triple. A franchisee for example was using a targeted amount. We had been using a targeted ounce amount similar to when the wings were smaller. And we just want to get that right. So, no, we haven’t been getting push back. I think a lot of it has to do with how we explain to our guests, whether we say, OK, today we’re serving five wings for a small order or six wings and making sure that, that guest understands. So as they, you know, this has been the way we’ve served wings for 30 years, and making that transition, we just want to make sure we get it right.”
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