Jack in the Box, aligned with quick-service norms, sees about 70 percent of its business at the drive thru. What’s also interesting for the brand is that half of the remaining 30 percent are takeout customers.
That reality is what led Jack in the Box to invest so heavy in throughput and speed of service this past year. Simply put, not that many customers are eating in its dining rooms—a pretty common reality for today's fast-food restaurants. Comma noted earlier in the year that customers aren’t telling the brand “they want to spend a lot of time in our dining rooms, and particularly don’t spend a lot of time in our dining rooms in groups.” It’s mostly individuals.
Convenience-driven elements and digital innovation, like order ahead and delivery, are where Jack in the Box’s guest is headed. It makes sense then to align investments.
The chain could cut back some SKUs as well as it works to improve times. Comma said that’s particularly true with sauces, bread carriers, cheeses, and other products that don’t necessarily get credit from diners. “We can still have great variety in our menu without having [these] sorts of ingredient counts to get there,” he said.
“But also, what we're seeing is that just procedurally, as we've brought some folks in from the outside and they look at the way we're running our operation, although we are close to a cook-to-order type entity, some of the ways that we cook our products, formulate our product, hold our product, our proteins, for example, we're kind of going about it at the hard way,” Comma added. “And with some tweaks both to equipment and procedure, we can make it a lot easier on our crews.”
A positive to take into 2020, and value stays the course
Jack in the Box reported same-store sales growth of 3 percent in Q4—its strongest performance in four years. The brand’s company comps upped 3.5 percent and franchise moved 3 percent versus growth of 0.8 percent and 0.4 percent, respectively, in the year-ago period. Of its 2,243 restaurants, 2,106 are franchised. It’s a 94 percent split achieved after last year’s refranchising initiative.
Jack in the Box’s full-year 2019 blended gains of 1.3 percent marked the ninth consecutive year of positive same-store sales. Q4’s 3.5 percent comp comprised of check increases of 280 basis points and a transaction lift of 70 basis points.
Total revenues for Q4 were $221.2 million and adjusted earnings were 95 cents per share, up from 77 cents last year.
As sales gain momentum, growth will, too, Comma said. The chain opened 19 locations in 2019, all franchised. Jack in the Box expects to ramp up in 2020 to 25–35 gross new unit openings (all franchised most likely). And that should accelerate further in years to come, he added.
Another 2019 change carrying forward is Jack in the Box’s menu strategy of using bundles to appeal to value-oriented guests. A focus on add-ons as well.
It recently launched $3 mini munchies, which features guest favorites like onion rings and curly fries. The deal provides value to customers seeking it, but also serves as a check driver in terms of building on.