BJ's plans growth outside West

<!--paging_filter--><p>BJ&rsquo;s Restaurants Inc. will begin testing television advertising and will roll out a new loyalty program in the second quarter, the company said Thursday.</p>
<p>After reporting <a href="http://nrn.com/article/bjs-4q-profits-42">a 42-percent increase in net income for the fourth quarter</a> and a 5.1-percent same-store sales increase, BJ&rsquo;s chair and chief executive Jerry Deitchle told analysts in a call that positive sales growth has continued into 2012.</p>
<p>For the first six weeks of the year, same-store sales are up 4 percent, lapping a 7-percent increase for the same period last year, Deitchle said.</p>
<p>The year ahead will bring more efforts to drive sales, but the chain also is positioning itself for growth outside its home base in the West. BJ&rsquo;s 115 locations are spread across 13 states.</p>
<p>BJ&rsquo;s has long envisioned national growth of up to 300 restaurants, and Deitchle said the company recently hired a consulting group to evaluate its domestic potential.</p>
<p>The chain now sees up to 425 possible BJ&rsquo;s locations nationally, although growth will remain &ldquo;careful and measured.&rdquo;</p>
<p>Deitchle also indicated that the company might be open to joint ventures, although none are currently planned.</p>
<p>BJ&rsquo;s first East Coast location is expected to open in the Washington, D.C., area at the end of this year or in early 2013.</p>
<p>This year, 15 new restaurants are planned and one smaller-format grill unit will be relocated a larger site.</p>
<p>Executives also discussed:</p>
<p>&bull; <strong>Television advertising test:</strong> A small test of television advertising will begin in the second quarter in two markets and likely will involve only a handful of restaurants, Deitchle said.</p>
<p>Although BJ&rsquo;s is a relatively small chain, and it may be early to consider national advertising, &ldquo;It&rsquo;s important to begin our learning of what benefit, if any, TV might offer BJ&rsquo;s,&rdquo; Deitchle said.</p>
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<p>Research has indicated that BJ&rsquo;s brand awareness is still relatively low, although once guests try BJ&rsquo;s, they tend to quickly become &ldquo;brand advocates,&rdquo; he said.</p>
<p>&bull; <strong>Loyalty building:</strong> A new loyalty program for BJ&rsquo;s, which tests have indicated will help build both repeat visits and spending, is planned for the second quarter.</p>
<p>Deitchle said the program will not be like other chains, which reward repeat visits with food or drink discounts. Instead, BJ&rsquo;s guests will be invited to accumulate points toward experiential rewards, like a chance to win a trip, he said.</p>
<p>As a casual-dining brand, a loyalty program at BJ&rsquo;s is not likely to work the same way it might at a restaurant that guests visit every day. &ldquo;It&rsquo;s not going to have the impact that a loyalty program at Panera might have on sales and margins, but it will have an impact,&rdquo; Deitchle said.</p>
<p>&bull; <strong>Off premise:</strong> BJ&rsquo;s also is looking at catering, as well as improving online ordering and to-go business, which has dipped through the recession, Deitchle said.</p>
<p>To capture more take-out orders, the chain plans to test this year a call center that would interface with BJ&rsquo;s point-of-sale system, &ldquo;like the pizza guys do,&rdquo; Deitchle said.</p>
<p>Off-premise sales now account for about 5.5 percent to 6 percent of total sales, he said, &ldquo;but we could do better.&rdquo;</p>
<p>&bull; <strong>Menu initiatives:</strong> BJ&rsquo;s has new products in the pipeline, and recently introduced Asian-inspired dishes such as kung pao chicken and orange chicken, along with miso salmon, Thai salmon and various teriyaki options.</p>
<p>New lunch entr&eacute;es starting at $5.95 have been added, including a chicken quesadilla and a one-topping mini pizza with salad.</p>
<p>The new Fan Burger line, introduced in November, has been a hit, as has a more premium ribeye steak offering, said BJ&rsquo;s executive vice president and chief restaurant operations officer Wayne Jones.</p>
<p>Next week, the chain will roll out its second annual Seafood Celebration with such additions as a new mahi mahi dish on the lower-calorie Enlightened menu.</p>
<p>In addition, a menu format revamp is planned later this year with the goal of better highlighting higher-margin items.</p>
<p>&ldquo;These are long-term investments that will help BJ&rsquo;s compete for market share in the long run,&rdquo; Deitchle said.</p>
<p>Contact Lisa Jennings at <a href="mailto:lisa.jennings@penton.com">lisa.jennings@penton.com</a>.<br />
Follow her on Twitter: <a href="http://twitter.com/livetodineout">@livetodineout</a></p>

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