Wingstop

Sep 15, 2021 | Report Announcements

Wingstop is the only $1B+ national chain with an exclusive specialization in the hot chicken wing category. Its “Wing Expert” brand positioning is centered around: cooked-to-order chicken wings (in a deep fryer without the use of heat lamps or microwaves) that are hand-sauced & tossed in a choice of 11 flavors ranked by heat; freshly-prepared sides including its hand-cut, seasoned fries (made daily from whole Russet potatoes) and fresh, hand-cut carrots and celery with ranch and bleu cheese dips that are made in-house daily; and convenient off-premise/digital access. The brand’s mission is to “serve the world flavor”. The system’s 64% digital mix is comparable with the major pizza chains and a 100% off-premise mix consists of 75% pick-up & 25% delivery. Bundle deals can feed groups and families for prices generally comparable to pizza deals. A steady share gain from the $1B+ chicken chains (from 4.5% in 2011 to 14.1% by 2020) was driven by consecutive years of positive annual comps (providing a testimony to the brand’s appeal with a fun, flavorful menu item well suited for families & groups with convenient access facilitated by an impressive tech stack). Long-term sales growth strategies include: building even greater awareness through national advertising; innovating through tech to further enhance the guest experience; and supporting delivery with national ads. A system high AUV translates into a near all-time high EBITDAR in absolute dollars and this explains the chain’s strongest-ever development pipeline. Having said all this, bone-in wing price volatility represents perhaps the chain’s most significant risk (exemplified by spot market prices for bone-in wings which increased +50% during 1Q21). This partially reflects that wing demand is skyrocketing as an extremely crowded menu category is exacerbated by the entrance of new virtual casual brands (including Applebee’s Cosmic Wings & Brinker’s Its Just Wings). COGs inflation challenges the chain’s value positioning, necessitates menu price increases and prohibits price certainty. In conclusion, while Wingstop’s strong execution around a very popular menu item has propelled the chain into the big league, its competitive bar has never been higher with notable implications around COGs and value.

No Bull Economics
Restaurant Research

Email Sign-up

Current Newsletter

Newsletter
15-Second-Podcasts
Digital Marketing Opportunities

Recent Posts

Restaurant Research

A Restaurant Research LLC Company