When Buffalo Wild Wings revealed that its net earnings during the second quarter of fiscal year 2017 declined by nearly 63 percent, the company’s CEO, Sally J. Smith, said one key reason for that decline was high chicken wing prices.
While wing prices are admittedly at a high point, one has to wonder if there is more to the story.
When Wingstop, another publicly-traded restaurant chain that specializes in chicken wing sales released its earnings about one week later, the situation was a little different. In Wingstop’s earnings press release, CEO Charlie Morrison did acknowledge that wing prices were higher than expected, but the company still managed to attain higher net income, revenues and sales.
Different focal points for different businesses
When I look at recent visits to both chains, I found the Wingstop and Buffalo Wild Wings food to be equally good, but the overall experiences a little further apart.
Wingstop, which does a heavier volume of carry-out than does Buffalo Wild Wings, put most of its attention on the food. In Wingstop’s earnings call on August 3, Morrison stated that the “quality and integrity of our food is our No. 1 priority.”
That seemed to be reflected during my last Wingstop visit. The atmosphere was comfortable and clean, the staff was courteous, and, yes, the food was very good. I could easily see myself eating again at Wingstop.
The story was a little different at Buffalo Wild Wings.
Buffalo Wild Wings carries with it the slogan “Wings. Sports. Beer.” That sounds like a good combination for a successful chain. But maybe the emphasis is being disproportionally placed.
During a recent trip, we saw what appeared to be several dozen television sets throughout the establishment with a different game on each set. If the particular game you were interested in did not have the score or other related stats in the corner of the screen, you simply had no idea how your team of choice was doing. With that many television sets going, it was also hard to hear any of the commentary from any of the games. Adding to the difficulty to hear was a young man at the table next to us, who was apparently oblivious to (or apathetic to) the fact that we really didn’t want to listen to him swear.
While other restaurants certainly also have to deal with cussing customers, there might be some other things Buffalo Wild Wings can do. Those could be things to address declining same-store sales, which Smith also said hurt profits during the last quarter.
Perhaps the company is trying to be all things to all people, which doesn't always work out well.
My advice: Trim down the number of TVs to about four. Put a college game on one, a professional game of the same sport on another, a different sport on the third, and just to mix things up, maybe put a “My Name Is Earl” or “Bonanza” rerun on the fourth.
And above all, continue to focus on the food. If you have good food at a good price in an enjoyable atmosphere, people will come.
Opportunities for new leaders
Both Smith and Buffalo Wild Wings Chief Operating Officer James Schmidt have announced their upcoming retirements.
While the company has not named a successor for either retiring executive, whoever is chosen will be given the opportunity to turn a struggling chain around.
I wish the successors well, just as I do for the retiring executives.