It was either evolve or fail, Dickey said about surviving the pandemic.
As CEO of Dickey’s, Laura Rea Dickey knows the restaurant back and front, but that didn’t stop her from needing to change almost every element as COVID-19 swept the nation. Dickey’s had to move to off-premise and, even with indoor dining back in some states, maintains a hefty lead on off-premise sales where before it was a small percentage of sales.
Dickey used promotions for customers and slashed royalties for franchisees to keep the business going. Dallas-based Dickey’s Barbecue Pit currently has over 500 locations. Here’s Laura Rea Dickey’s story:
“During COVID-19, we leaned on our purpose statement, which is “to do both well and good in the communities in which we do business.” We also focused on our mantra – evolve or fail. Both served us well. We doubled down on our technology platforms and were one of the first brands to launch contactless delivery in March. We made additional investments in online ordering to keep up with the shift from dine-in orders to online, carry-out and delivery. We also shifted almost all of our marketing spend to digital channels and brought our dine-in Kids Eat Free special online. We also cut franchise royalties by 50% for 14 weeks to help owners with cash flow and retain as many team members as possible.
To serve our communities, Dickey’s Barbecue Pit locations around the country launched our first responder sandwich donations packs online and began weekly free sandwich deliveries to first responders.
We were planning to launch our ‘Upgrade Your ‘Cue’ promotion as a sales driver for Q2 and Q3. The promotion encompassed four new sauces and six new sandwich builds. Our team had put in countless hours on the ‘endless sauceabilities’ campaign, and all stores received dine-in sauce kits, complete with bottles and caddies for guests to self-serve and customize their sauce experience.
We were challenged to adjust this national dine-in, self-serve sauce promotion with national media to be appropriate for an off-site dining, delivery only reality with no ability to self-serve. We had three weeks to make these changes. We believed in the campaign and ultimately decided to move forward adjusting for a completely online implementation. We added the ability to customize sauces as well as new menu items to Dickeys.com and supplemented with virtual training.
Our decision paid off.
By keeping a mix of recession-minded offers and introducing new menu items that increased repeat purchases, we were able to increase check count by 391%. Thanks to our More for Monday deal and extended sandwich offerings, in July we saw a 3.22% increase in net same-store sales and an average Monday ticket increase of 6.78%. All of our new sandwich builds continually gained traction month to month and by July our fans had discovered their new favorite combinations such as the Carolina Pulled Pork, which saw a 373% increase in sales growth compared to June and our Brisket Double Cheese which grew in popularity 222% from the previous month.
Our digital sales have now replaced what used to be our traditional dine-in traffic nearly 1-to-1, and our overall check counts are up compared to last year, so our biggest current challenge is supply chain consistency, labor/team member availability and the ever-changing state operating guidelines. We have labor shortages in some markets and product supply challenges in other markets where operations are still heavily restricted.
With nearly our entire audience shifting to online ordering, we knew we needed to optimize their user experience to keep them coming back. Our in-house tech department streamlined the online ordering experience for guests and our digital team got right to work on targeting ads to mobile users. We advertised entirely through our digital channels and promoted a combination of value-driven family deals and new product offerings.
For local enhancement, we rolled out a variety of materials for our owners/operators to print and use at the store level, including ‘we’re open’ banners, flyers, social-distance stickers and more. We also ensured a large part of our messaging showcased free delivery and our enhanced serve safe practices, all while highlighting our first responder support initiatives.
We provided immediate relief for franchisees by cutting, not abating, royalties by 50% for three and a half months. We matched first responder donations of free sandwiches for all locations. In addition, we revamped several of our franchisee portals to create a more responsive 24/7 communication experience and upgraded to a more mobile-friendly dashboard operators could use at their fingertips. We also upgraded our online training platform.
Before the pandemic, I was on the road 60% of the year traveling all over the country from cities like Traverse City, Mich., to Pensacola, Fla., meeting with owners/operators in their stores to hear what was working for them in their specific market. While I’m traveling less frequently, I have come to appreciate the flexibility in being able to work anywhere there is a will and WiFi.
Our future is still bright! Restaurants still play an important role for folks. In the future, I think fast-casual/quick-service restaurants will have a much smaller store footprint and delivery will be at the forefront of every business model. We’ll see less competition and more emphasis on value in menus. Our brand had the delivery infrastructure in place before the pandemic, however resilient brands, like ours, always take challenging times as an opportunity to reinvest, renew and emerge stronger than before.