Dive Brief:
- Wingstop generated $1.7 billion in digital sales during 2022, CEO Michael Skipworth said Wednesday during the company’s Q4 2022 earnings call.
- The chain’s digital mix is above 60% and delivery makes up about 30% of sales, Skipworth said.
- Unlike other chains, such as Chipotle, that have seen digital sales stagnate as a percentage of revenue as consumers revert back to pre-pandemic behavior, Wingstop’s digital business is expanding, Skipworth said.
Dive Insight:
Skipworth believes Wingstop —which has been expanding its delivery channels with new partners, including Uber Eats in 2022 — has an opportunity to almost double its delivery sales.
“DoorDash and Uber Eats marketplaces are additional avenues for us to build awareness and capture incremental occasions,” Skipworth said. Based on talks with Uber Eats, Wingstop learned that it is “just scratching the surface” with users on the platform, he added.
Businesses that are similar to Wingstop and have heavy off-premise emphasis tend to have delivery mixes of over 50%, Skipworth said. He believes Wingstop has significant growth potential in the channel.
“Our awareness on these delivery platforms is still really low,” Skipworth said. “We’ll continue to build that whether it’s through specific promotions or actually using some of our ad dollars to advertise on those platforms.”
Growing its delivery channel is one of the many strategies Wingstop is employing to reach its goal of $2 million average unit volumes compared to its current $1.6 million. These tactics include improving its digital platform, as well as driving brand awareness, menu innovation and using data-driven marketing, Skipworth said.
The company has deployed new digital-focused formats like ghost kitchens and is testing an off-premise-focused prototype, which it opened last year in Dallas. The chain is investing in greater personalization on its digital platform in hopes of increasing frequency. Eventually, Wingstop wants to digitize every transaction, Skipworth said.
Transaction growth has also helped Wingstop inch closer to its $2 million AUV goal. Increased transactions drove same-stores sales growth of 8.7% during the fourth quarter, Skipworth said. Comparatively, other chains that had to increase menu prices last year saw traffic steady or falling, but Wingstop has seen deflation with its food costs, he said.
“With the strength of our transaction growth in the second half of 2022, we are playing offense and are acquiring new guests and building frequency as a result of our growth levers,” Skipworth said.
The QSR opened 228 net units last year, a 13.2% growth rate, and has a global pipeline of 1,100 units forthcoming Skipworth said. This year, Wingstop expects to open 240 net units, which he said is well above the company’s three--to-five-year target growth rate.
