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Thursday, October 27, 2016

Chains like Buffalo Wild Wings and Papa John's should be worried about the NFL

[buffalo wild wings]Facebook NFL viewership is falling, and restaurant chains like Buffalo Wild Wings and Papa John's should be worried. Pro-football viewership is down 11% this year. Viewership is down by double-digit percentages for all of the NFL's prime-time spots, consisting of football on Sunday, Monday, and Thursday nights, according to Sports Illustrated. For chains that rely on football fans either watching games in their restaurants or ordering takeout to watch at home, this decline could mean a slump in sales. Buffalo Wild Wings addressed the issue directly in a call with investors on Wednesday. Buffalo Wild Wings COO James Schmidt said the NFL wasn't serving as the crucial sales driver it could be. In general, the chain's sales on NFL game days are experiencing the same slight slump as Buffalo Wild Wings' business more widely, with overall same-store sales declining by 1.6% in the third quarter compared with the same quarter last year. Schmidt said, however, that the company wasn't seeing anything "dramatic" yet. [buffalo wild wings]Facebook At least one analyst is worried about the chain of sports bars. "We believe any decline in NFL viewership, if sustained, is likely to have a pronounced negative effect on traffic at Buffalo Wild Wings," Maxim Group analyst Stephen Anderson wrote to clients before the earnings announcement. Anderson cut his "target price" on the company's stock to $155, down from $170, Barron's reports. For now, Schmidt said, the success of teams in certain markets has been key to keeping customers coming to the chain. "This year we've got Minnesota playing well; Dallas is playing well; and out in LA, you've got the Rams having moved back to LA and Oakland Raiders are having a good season," Schmidt said. "So that helps to lift some of our bigger markets." The NFL is a huge sales driver at Buffalo Wild Wings, and even small changes to the league's schedule can have major consequences for the chain. Last year, the company said having one fewer week of football in the third quarter because of scheduling negatively affected same-store sales by 80 basis points (almost 1 percentage point). [Wingstop]Facebook Buffalo Wild Wings isn't alone in leaning on the NFL to boost sales. Pizza and wings chains, especially those with a high-percentage of takeout and delivery sales, similarly rely on NFL games to drive traffic. Last year, Wingstop attributed a 70-basis-point sales decline to having one less week of NFL-watching customers in the third quarter (like Buffalo Wild Wings, the companies had an extra NFL game in the fourth quarter as a result). Chains from KFC to Pizza Hut have all launched football-inspired ads, though Pizza Hut focuses on college football. Papa John's is an official partner of the NFL. [papa john]Facebook "Watching sports is all about sharing an experience. Pizza, too, is meant to be a shared experience," Robert Thompson, the senior vice president of marketing at Papa John's, told Business Insider in August. "We noticed that connection a long time ago as we began to grow and elevate our marketing efforts both locally and nationally." In the most recent Super Bowl, Americans ate roughly 1.3 billion chicken wings for Super Bowl 50 and, according to The Wall Street Journal, nearly 12.5 million pizzas. But, it's not just the Super Bowl that drives wing and pizza sales. Every game day serves as an opportunity for chains to offer promotions to win over customers. If NFL viewership continues to decline, these chains will need to find a way to make up for lost sales. NOW WATCH: We tried the trendy restaurant that could become the Chipotle of Greek food


READ THE ORIGINAL POST AT www.businessinsider.com