Wingstop is succeeding by refusing to be the type of place where people come and stay a while.
The chicken chain increased total revenue 16.5% in the third quarter, Wingstop reported last week. The company is on track to deliver its 12th consecutive year of positive same store sales at the end of next quarter.
The growth is especially remarkable as wings chains, such as Buffalo Chicken Wings, have been hurt by a shorter fall sports calendar and higher than usual chicken prices in recent months. According to Wingstop, the company’s secret lies in keeping things simple — and getting the majority of customers out of the restaurants as quickly as possible.
T Wingstop’s business is take out — a far greater percentage than the majority of quick-service restaurants. This allows Wingstop to keep restaurants small (about 1,700 square feet), minimise costs, and prepare the company for two of the biggest trends in the industry: online ordering and delivery.
Since the company rolled out a new online ordering platform and mobile app last year, online orders doubled. Now, they make up about 15% of all domestic sales.
“Online ordering is a significant opportunity for us because of our take-out mix of 75%, our cook-to-order menu, and younger tech savvy millennial customer base,” Wingstop CEO Charlie Morrison said in an earnings call.
Also appetizing for Wingstop is the fact that the average check for an online orders is about $US4 more than the typical Wingstop order.
Wingstop has thus far avoided making any outright promises on the issue of delivery, something that a Morgan Stanley research note says that, if executed well, could be a long-terms sales driver for the company.
“We have to be cautious of making sure that any third-party company that we would do any business with is going to commit to delivering upon our expectations,” Morrison said in the earnings call. “We hand cut every potato in our restaurants to make our Fresh Cut Seasoned Fries every single day. Those fries wouldn’t hold up well if a third-party delivery driver took a long time to get it to the customer.”
In other words, don’t expect Wingstop to go the route of McDonald’s or Chipotle and entrust their delivery to Postmates or a similar third-party app — if Wingstop adds delivery, it is going to make sure to do it right.
Until that time, however, Wingstop is doing just fine the way it is.
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