Dive Brief:
- Cava posted 18.1% same-store sales growth in Q3 2024, according to its earnings release, while its AUV jumped to $2.8 million, a $200,000 increase from the year-ago period.
- The chain’s same-store sales growth owed much to traffic, which was up 12.9% with the remainder driven by price and mix.
- Cava has emerged as a clear winner for 2024 among the growing fast casual segment, with 62 net new restaurants since the end of Q3 last year, representing 21% growth.
Dive Insight:
CEO Brett Schulman attributed some of its success to Cava’s efforts to give its stores a warmer, more inviting atmosphere through a design effort called Project Soul.
“For some time, we've been at the forefront of a contrarian point of view that the demise of the dining room is greatly exaggerated,” Schulman said on the brand’s earnings call. “Consumers are looking for warm, welcoming places to dine.”
So far, that welcoming atmosphere consists mostly of softer seating, more greenery and a warmer in-store color palette, according to the earnings call. The chain’s new loyalty program has also helped drive sales, Schulman said.
Cava's same-store sales growth from Q2 2023 through Q3 2024
Some other brands have refocused on the in-store experience this year after a long period of intensive investment in off-premise and digital channels. Starbucks is the most notable of these. Quarter after quarter of sliding traffic and sales and years of difficulty balancing digital and in-store experiences, have driven the world’s biggest coffee brand to try to return to a coffeehouse vibe under new CEO Brian Niccol.
If Cava’s success continues, and Starbucks’ in-store investments pay off, restaurant brands may re-evaluate the emphasis on transaction, digitalization and speed at the expense of traditional hospitality.
Schulman said part of Cava’s success stemmed from using its digital channels to “enhance, not replace, the human experience.”
Cava has become “the leader of [the] fast-casual Mediterranean” market segment, William Blair analyst Sharon Zackfia wrote in an analyst note emailed to Restaurant Dive.
“We see the potential for CAVA to generate more than $2.5 billion in revenue and roughly $400 million of adjusted EBITDA by 2032 at roughly 1,000 locations,” she said.
Building on the success of its Midwest launch in Chicago, Cava is looking to enter a number of new markets in 2025, including South Florida as well as two more Midwestern markets. Many of the new stores, Schulman said, will make use of the Project Soul principles that are driving improved results at stores. Schulman said the brand’s newest stores have generally performed ahead of expectations.
