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BJ’s Ups Store Remodel Initiative

BJ’s Restaurants Inc. (Nasdaq: BJRI) is accelerating its companywide store remodel plan.

The Huntington Beach-based restaurant chain, the 4th-largest based in Orange County with annual sales of about $1.3 billion, initially set out to renovate approximately 30 of its 200 locations, prioritizing seating arrangements and capacity.

During its second-quarter earnings call at the end of July, Chief Executive Greg Levin updated this initiative to now include 35 to 40 restaurants for the chain, which counts a market value of $855 million.

“We are accelerating our remodel plan due to the encouraging results and financial return profile these remodeled restaurants have delivered to date,” Levin said in a statement.

All parts of the restaurant have been analyzed for potential updates, such as “an updated bar statement, new lighting, artwork, booths, and tables.” A new addition: 130-inch TVs are being added to dining areas, the company said.

The bar remodel has been the most significant, Levin said, attributing higher weekly sales average increases and profits to the changes. The updates can cost anywhere from $400,000 up to $700,000.

20 restaurants have already been renovated.

Doubling Up

While the remodels gain priority, BJ’s remains dedicated to more than doubling its restaurant count in the long term, with a goal of reaching at least 425 locations.

Levin said that since current new restaurant builds are reaching the mid-$7 million range, up 35% since 2019, the development department will design a new prototype to reduce the cost by around $1 million.

“Because of the significant savings, we are submitting new plans for most of our 2024 new restaurants,” Levin told analysts. Openings are projected to be pushed back as a result.

Executives anticipate five new locations this year and a similar amount in 2024. Levin expects an increase in the rate of new restaurants in 2025.

Productivity

Another part of the company’s growth strategy includes improving employee retention.

Levin told analysts that improvements are forthcoming as BJ’s “narrows the gap to pre-Covid levels.” The company reported labor productivity metrics in the second quarter were better than both last year and in 2019.

BJ’s currently counts around 22,000 employees companywide.

The company also revealed a new, streamlined menu in July that removed certain dishes based on guest research.

“Having less items but the right items for our guests will allow us to improve our daily execution by increasing repetition of guest favorites while reducing prep hours in our kitchen,” Levin said.

He added that newer culinary items will be designed to match this strategy.

“We’re seeing very similar levels of dessert attachment, appetizer attachment, drink attachment, and consistent levels of what types of things that they’re ordering,” Chief Financial Officer Tom Houdek said on the analyst call in July.

Savings Initiatives

Last year, BJ’s worked to identify savings opportunities that would benefit operating margins and total approximately $25 million. Levin announced that the company surpassed this goal during the quarter “which helped reduce food, labor, and operating and occupancy costs.”

Additional initiatives will be rolled out later this year to increase these savings.

Revenues reached $350 million for the second quarter, up 6.1% from a year ago. BJ’s aims to reach $2 billion in annual sales in the near future.

“We heard loud and clear from our consumers that we provide a better-quality dining experience and that comes with better-quality products,” Levin said. “We’re going to continue to do that in the right way to move our margins in the right direction.”

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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