Dive Brief:

• Chuck E. Cheese has debuted a new mobile app and rewards program as part of its Summer of Fun event running from Memorial Day through Labor Day, according to a company press release. The event also includes a Summer Fun Pass Program, which offers games, special menu promotions and exclusive offers.
• App users can redeem rewards, book birthday reservations, purchase gift cards, access Chuck E. Cheese content on YouTube Kids and manage benefits that come with the Summer Fun Pass. Customers can also order for pickup or delivery via the app while in-store dining capabilities are coming soon. For every dollar spent in-store, online and in-app, members will earn one reward point.
• These new initiatives mark an expansion of its operational strategies to further engage its diners beyond the in-store experience, a move that could help it bounce back just five months since the eatertainment brand emerged from bankruptcy.

Dive Insight:

Chuck E. Cheese's new program and app illustrates the growing demand from a post-pandemic consumer for both dine-in and off-premise options. That omnichannel approach, combined with the significant savings and exclusive offers for diners, could help draw more customers and kickstart a rebound for the company, which declared Chapter 11 bankruptcy in June 2020.

It was a tough year for most of the restaurant industry, but it was particularly hard for the eatertainment segment, not just Chuck E. Cheese. Punch Bowl Social filed for bankruptcy in December, while rumors began to swirl in September about Dave & Buster’s declaring bankruptcy in September. But as Dave & Buster’s is starting to show, a comeback is possible for these types of concepts. Pent-up demand for both dining out and entertainment could accelerate that comeback. According to Morning Consult, 50% of consumers say they are "very excited" or "somewhat excited" about going back to a restaurant. 

 As such, several new eatertainment concepts, like Ke’nekt, Puttshack and The 3rd Spot, are starting to emerge.

That pent-up demand likely also exists for Chuck E. Cheese, as parents look for ways to entertain their children who have gone nearly a year without their typical activities. However, a challenge exists in that vaccines are just starting to roll out to children ages 12 and up. A broader rollout isn't expected to come until late 2021. For now, there remains a risk. In California, for example, children now account for more than one-fifth of all new COVID-19 cases.

Still, Chuck E. Cheese seems to be finding some stable footing after its tumultuous year. In April, the company raised $650 million in private notes and entered a $50 million revolving credit facility to increase its financial flexibility and position the company for a rebound. This new loyalty program could provide an even bigger boost. For instance, the program's levels include set minutes of game play, promoting both return visits and longer visits. Additionally, households with children have indicated they would be willing to spend more at a restaurant with a loyalty program.