As inflation continues to weigh on businesses, restaurant chains are feeling the pinch. We sat down with David McKillips, CEO of Chuck E. Cheese, to learn how the popular family-friendly chain is navigating this economic environment.
Full Video Transcript Below:
CONWAY GITTENS: So as a business, how is the inflation story progressing? I mean, we've seen the inflation numbers come down. It's still elevated. People still people are mad. They are about higher food prices. And how what do you see in terms of when you're dealing with your suppliers? So you're making fresh pizza. You need, you know, cheese and tomato sauce and dough. What are you seeing in terms of the prices?
DAVID MCKILLIPS: We're seeing commodity pressures in cheese and and bone in chicken wings as well. But we have a very simple menu. So we're just we are we are cheese. And the majority of pizzas that we sell are catering to a young audience. So it's cheese and pepperoni, right? And then we do have a fresh salad bar that that that we look at in terms of, you know, moving ingredients around. But we're still seeing commodity pressures in chicken and some cheese and some tomatoes. But we look at menu simplification and we try to deliver that that that best price. Back to our guests.
CONWAY GITTENS: And I'm wondering, we've been hearing some rumblings every now and again that comes up every few weeks about recession fears. What in terms of your business, what are you seeing in terms of I know you can't give specific numbers because your quiet period, what are you seeing in terms of foot traffic? Are you seeing increase? Are you seeing is it the same as it was a year ago? Like give me some kind of indication of how. Things look from where you sit.
DAVID MCKILLIPS: Yeah, just from a trend perspective, we've seen great demand on our new membership and pass programs. So we have seen the inflationary pressures against these young families and they have been responded with demand on certain offers that we have had. And we've used new outlets in terms of, you know, placing coupons out there in new areas like Groupon. But really we've looked at two things. One, the membership platform and past platform has been outstanding. And then the other piece of the business that we haven't talked about yet, but it's very, very important to Chuck E.Cheese is birthday parties, right? So I'll step back for a second and just answer the question about recession in totality. So Chuck E. Cheese historically has done pretty well through any recessionary time periods where parents will continue to spend even during a recession, is on their kids and on their pets. So we are a recipient of making sure that we're delivering great memories and great service, and there's more competition than there ever has been in the FEC category. So we've just got to make sure that we're delivering a great product and our brand transformation has helped that as well.
