Dennis Geiger: That’s helpful, Sandy. One more quick one, and apologies if I missed. Just by cohort, some of the traffic softness, can you speak at all to whether it’s age, demographic income, et cetera? Just what you saw in the quarter from that perspective if you’re providing that?
Sandy Cochran: Yes. We — I’ll kind of tell you broadly what we saw. Our traffic declines were broad-based. They were against all of the age cohorts, which was a bit of a shift. The younger cohort held up better than the over 65, but it had been doing even better in the quarters prior. On the over 65, we just have not yet recovered the visits with that group to the extent we thought we would, really since the pandemic, whether it was in the beginning, health concerns and then the pivot from health to value concerns as we’ve kind of talked about here, we’ve got consumers — it’s a mixed picture, right? We’ve got consumers that we think are very value conscious. And we think that group is — the over 65 group is particularly value conscious.
And so, we just haven’t seen the recovery of that group in the way we would. The income level — our traffic declines were actually larger in the 60,000 to 80,000 and plus cohorts. The lower income cohorts held up better. Maybe that’s not surprising due to the strong value proposition that we have and the — when you are managing your visits, I believe you’ll go to brands you trust where you know you’re going to get value, and you’re going to get an experience that kind of makes it worth you going out. That’s why our — the brand positioning, warm hospitality, plentiful portions, fair price of just good food, I think, will work even if what we’re moving into is a more competitive value-conscious consumer.
Operator: Next question comes from Alton Stump with Loop Capital. Please go ahead.
Alton Stump: Great. Thank you. Good morning. And I just wanted to say congrats, Sandy, on your 12 years. We will certainly miss you, but look forward, obviously, to working with the new team soon. I just want to ask quickly — I know it’s close to the top of the hour here. But just I want to ask about your loyalty rollout. How much an opportunity that is, kind of going back to your comments about with younger consumers, that’s always been a group that you guys have tried to expand with, maybe a little older set on average versus some of your peers. And so how much of an opportunity do you think loyalty could be to capture even more of those younger consumers to come to your brand?
Sandy Cochran: I don’t think we’re ready to quantify. I’m looking at Craig. I doubt he’s going to give you any numbers. We’ve certainly done a lot of modeling about it. It takes time, so we got to get everybody signed up. They have to visit frequently enough to earn. But what I will say is that a year or at least ago, so after we did a recent segmentation study, we looked at the segments. And one of the interesting findings was really across age cohorts, more than I was expecting to see the existence of a loyalty program was important, both to our loyal guests, older and are younger. Technology in general is more important to a younger guest, but the loyalty program came up surprisingly high on the list. So, we are optimistic that this will be something that they’ve hoped we would do and we will get great sign-ups, a lot of learnings and so on.
This is actually an area that Julie has quite a bit of experience, and she spent quite a bit of time since she’s been here just in understanding what the program is and our rollout plan. Julie, do you have anything you’d like to maybe add to it?
Julie Felss Masino: Sure. Thanks, Sandy. Hi, Alton. Yes, what I’m excited about with the loyalty program, and I think what our guests will enjoy most is that, one, they can earn across restaurant and retail, which, if you think about it, that’s pretty distinctive and a key differentiator for us as a brand because we have both of those experiences available to our guests, we’re allowing them to earn across both. That’s number one. Secondly, every item, whether it’s restaurant or retail, our menu is eligible to earn points in our — or pegs in our highly differentiated scheme here. And you can actually redeem across everything, except for alcohol. So that is really another key point. And then finally, to Sandy’s point, we know technology is important to a lot of our consumers.
But even if like you’re not super into technology, we’re allowing you to earn points outside of the app, which is really distinctive in the industry and will allow everybody to participate and let everybody know that we value them and that we value their visits with us and that they can participate in what we believe will be a really exciting program. So, the team is excited. It’s rolling out in the next couple of weeks. And we’re optimistic about what it will do for the brand.
Operator: Our next question comes from Andrew Wolf with CL King. Please go ahead.
Andrew Wolf: Thank you. I wanted to follow up on the loyalty program question. You asserted that it’s the best-in-class. Is that something you work with consultants and got a third party, or is that just your sense of it doing your own benchmarking you’re looking at your competitors? And beyond that, could you kind of give us kind of — give us a sense of, especially if it’s a benchmark number or a third party, what you’re hearing a best-in-class loyalty program, or what you believe kind of means for the business in terms of eventually boosting the traffic?
Craig Pommells: Hi Andrew, it’s Craig. I think potentially best-in-class, I think as Julie talked about, we believe the loyalty program is — it has more options. It’s really well branded. You can earn — we earn pegs or what we call points, both for — both for in-restaurant as well as retail. You can accrue the points through an app. You can accrue them at the register as well. You earn meals at different levels. So, we have different status levels. So as we went through and we did a lot of this internally, but we also have a loyalty expert with a lot of experience who has done this in retail. And we compared elements of different loyalty programs, certainly across the restaurant industry. We really check all of the boxes, I believe, in the restaurant industry and many of the boxes in broader retail. What we believe is best in class is what we’re seeing when we compare to family dine-in and casual dine-in.
Andrew Wolf: But would you be willing to give maybe a range of expectation for what it should do for the business ultimately?
Craig Pommells: We’re still in early days on that one. I think it’s going to be a big driver for us, not only in terms of the appeal and its kind of short-term ability to drive repeat visits, but our ability to market the Company more broadly using the data that we’ll get from that program. We think that will have a longer-term benefit in better equipping us with our broader marketing communication to make that more targeted and more active and more efficient.
Andrew Wolf: Got it. I appreciate that. And just — I wanted to ask about the traffic. It was helpful to hear about the different segments and so on and cohorts. But can you give us a sense of how the cadence by months? And specifically, did it slow down, get worse, or did you just not improve as expected throughout the quarter and obviously, into the current quarter?
Craig Pommells: Broadly speaking on that one, on our prior earnings call, we shared that while we had done relatively well in Q3, we were ahead of the industry. We shared that we saw a deceleration in traffic as we moved into the fourth quarter. And so far, we’ve said that our first quarter remains pressured. So, without getting too prescriptive around it, we would say both at the beginning and where we are today, remains fairly soft without a big trend change, one way or another. We are pleased with some of the progress that we’ve made at breakfast with the advertising that we’ve put forward. We’re continuing to be pleased with our catering business, which is growing even in spite of a challenging environment.
