Dive Brief:
- Dave & Buster’s is scaling back its broad efforts to remodel restaurants and adjust service following a disappointing quarter, according to Interim CEO Kevin Sheehan on a Q4 2024 earnings call last week.
- Sheehan, who took over in December, is pursuing a back-to-basics strategy for the restaurant chain. His goal is to dial back an approach that made “too many” changes to the brand’s menu, service style, labor configuration, remodel activities and other aspects of the business.
- In an attempt to improve the business, “prior leadership made very dramatic and chaotic changes that among other things, distracted, confused and overwhelmed our customers and our operators,” Sheehan said during the call.
Dive Insight:
Former CEO Chris Morris left in December after several quarters of falling same-store sales. Dave & Buster’s may be paring down some of the plans he had championed, but some CX improvements are still on the table.
While the company’s CX efforts paid off with rising guest satisfaction scores in the third quarter of 2024, sales didn’t follow suit. In the fourth quarter, revenue fell again, dropping 10.8% year over year to $534.5, while comparable store sales fell 9.4% year over year, according to a Dave & Buster’s earnings report.
One of the angles the brand is taking to improve its fortune is revamping its approach to restaurant remodels.
Morris set out to refresh most of the store fleet by 2026 with an eye toward improved appearance and improved experiences, but Sheehan saw flaws in the rollout strategy. In particular, he said, money and energy was being spent at stores that didn’t need to be refreshed.
The updated remodeling program will proceed “with a more measured pace” in the first half of 2025 while the company gathers data to guide its future plans, according to Sheehan. He still sees an opportunity to “brighten” locations and rework the front-of-store experience, but believes these goals can be accomplished for less money than what was being spent.
“There is no doubt that an effective remodel program should deliver high returns on investment and drive meaningful same-store sales growth,” Sheehan said.
The gaming experience is also under consideration. Dave & Buster’s is testing two different ways to extend the time of play for game passes to improve the customer experience while maintaining its margins.
While Dave & Buster’s hasn’t confirmed how it will approach the test, Sheehan hypothesized that a game and lunch combo could offer customers a unique guest experience while drawing in traffic during a historical low point.
“And so, you have this great experience vis-a-vis anything else you would have in going to any other type of restaurant,” Sheehan said.
This, too, is a change from the company’s former approach to attracting customers during off-peak hours. In June 2024, Morris said the company was exploring a flexible pricing model that could help attract customers during slow hours while increasing prices at other times.
