Alex Slagle: Helpful. Thank you.
Greg Levin: You’re welcome.
Operator: The next question comes from Josh Long with Stephens Inc. Please go ahead.
Tyler Prause: Thanks for taking the question. This is Tyler Prause on for Josh. I would love to hear more about just the general pricing philosophy at BJ’s and where do you stand on third-party pricing. Like I think in the past you’ve talked about pricing tiers. So, any update on that would be great. And then the second one if the industry were to shift to more of a value sentiment how would you approach that situation?
Greg Levin: I’ll give you some more philosophical. I think Tom might be able to add some mechanics in there as well. Look our pricing strategy is always to be around a good, better, best; pricing strategy. The good is our value items or items that we call KVIs known-value items. We want to make sure our burger or our chicken alfredo and other items that you might see across different casual dining concepts is very competitive. Then we want to have the ability for guests that want to indulge and know that they’re coming to a higher-quality casual dining concept that might want the double bone-in pork chop. They might want the filet or the rib-eye. Those all allow guests to kind of price up a little bit including things that are on our Slo Roast menu.
The same thing actually goes for the bar and the beer side of it. We’ve been really working on what I would consider a best-in-class bar statement and it’s allowed us to have some higher-end bar drinks or cocktails that guests want to spend up. They can, but they’re getting a higher quality for it. They’re getting uniqueness and differentiating what we call the Brewhouse Theater. At the same time, as part of our menu strategy as well or our pricing strategy, we have our daily Brewhouse Specials. So, those allow for guests to come in on specific days and get something at a really good value from a price point whether it’s our Slo Roast Thursdays where around $19 you can get a rack of ribs, two sides, starter salad and a full Pizookie dessert.
That drives obviously a lot of guests into our restaurants because it’s something that we can do and it’s differentiated from a quality standpoint. So we’re going to continue to balance across that. We also have our lunch specials as well. So depending on how the economy is or how we want to target guests in certain markets sometimes we’ll target them with a value statement around our lunch specials or our daily Brewhouse Specials. Other times we’ll target them around some of the indulgent items or some of the limited-time-only items that kind of drive a fear of missing out. Our Spooky Pizookie perfectly played into that. That drove a FOMO from our guest standpoint. We need to come in the restaurant and get this Pizookie before it disappears.
So it’s a combination of different areas that we want to target based on those individual restaurants as well as the macro environment. And then I don’t know Tom if you want to add anything specific towards our pricing.
Tom Houdek: Sure. In terms of the third-party pricing we did implement an extra 10% approximately across our third-party platform. So that’s in place. And in terms of tiers we are going through a retiering process right now and some of that due to California needing to be separated out for some other restaurants because of now a new minimum wage as well as there were some changes on the rules around pork products here as well which increased some costs. We’re also just looking to see which restaurants should be paired together in terms of sensitivities that we can measure. So that process is ongoing and should be something that we roll out next year. And I think I’ll just echo too what Greg said about the promotions. We’ve never backed down from our promotions.
So if there’s other promotions ramping up we still have some great daily Brewhouse Specials promotions out there great happy hour promotions great lunch value as well. So its — when we market it is about brand building but it’s also there’s a mix in there too about getting the awareness out to drive traffic in for these promotions. And we’re even looking at the promotions if these are the right ones if there’s ones that can drive even more traffic. So I think the — I don’t — as we look at the landscape there are certain brands out there that are using more promotions now or more value and I think we’ve got a good mix already and a really attractive one that will drive people in in any of these forward-looking type of environments.
Tyler Prause: Great. I appreciate all the color there. Super helpful. And just one follow-up. So the G&A kind of coming in at the low end of the range for 2023 is encouraging. And just kind of think how you’re thinking about G&A going into full year 2024.
Greg Levin: So right now we’re in the middle of our budget season. But our goal always on G&A is to grow it at a rate less than top-line sales so we can leverage it going forward. So as we continue to put together our plan and look at what our revenues might be for next year we’ll make sure that we’re looking at G&A and going it’s got to be below that so we can get leverage going forward. Tyler?
Tyler Prause: Yes. That’s all from me.
Greg Levin: Okay. Thank you.
Operator: The next question comes from Andrew Wolf with CL King. Please go ahead.
Andrew Wolf: Thank you. Good afternoon. I want to switch to your lower cost to build the new restaurants and just kind of a basic question. Is that necessary, I mean, to get to the IRR hurdles you have talked about before which I think is 20%, or was the better-than-expected sales that the restaurants have been achieving already getting you there? And I also wanted to just ask you a math question. I’m getting to about a 2% to 3% higher return on investment by bringing the cost down $1 million. Just wanted to run that by you as a reality check.
Greg Levin: Andrew, it’s a great question actually. And .we always continue to look at our prototypes over years to make sure we’re basically building the right prototype for our business. And I think as we continue to look at it and evolve our menu and other things we tend to make adjustments that seem fit to be – that seem to make sense for us going forward. So while the $1 million reduction in investment costs will help us drive our ROI as you just said you can just kind of put it in there and look at where our WSA is and drive the margins, some of the changes in there will allow us to be more efficient around how we build our – around how we run our restaurants. Reducing some of the square footage, the way we set up our bar statement allows us some efficiencies there and then some of the changes in the kitchen with team members.
So we always want to optimize it that way. The other side of it as well is we want to continue to understand how the consumer preferences are changing. Some of it comes down to off-premise and where we’re building our restaurants. So if we’re building our restaurants in certain markets maybe in California, we might use a little bit of a larger format because we know the California brand awareness of the BJ’s concept. Going into some of the different markets that might be a little bit smaller, having that smaller prototype is going to give us better efficiencies in those restaurants. So it’s a combination of both of those things. But even as we look to build this current prototype for next year Greg Lynds, who’s actually at a real estate conference this week and his team is actually looking at what that next evolution is going to look like with a couple of other changes that again continue to optimize not only the cost of it but optimize the way we can execute within the four walls of the restaurant.
