This article was published in the September 2016 issue of STORES Magazine.
Chain’s president touts new mall growth plan
It’s been 30 years since the first Johnny Rockets restaurant opened on Melrose Avenue in Los Angeles — adding a new, West Coast wrinkle to what a quality burger joint was supposed to look and feel like.
Now the 350-unit chain is reinventing itself. A new design and faster cooking technologies are the engines driving the Lake Forest, Calif.-based company’s continued expansion into malls and outlet centers. Overseeing this growth is James Walker, president of global operations and development.
Walker, who has more than 25 years of senior management experience in the hospitality and retail industry, was formerly chief development officer at Beef ‘O’ Brady’s and The Brass Tap. He spoke with STORES contributing writer Bruce Horovitz about future plans for Johnny Rockets.
With mall traffic shrinking, why is Johnny Rockets continuing its move into malls?
If you can’t change one side of the model, you need to change the other. We can’t change the real estate model in malls, but we can change what’s going on with our restaurants to make them work better in these venues. So we’re leveraging our relations with new technologies that allow us to go into malls with smaller spaces and greater production that makes the real estate model still work for us.
Even while business at many malls heads south, Johnny Rockets can locate inside them and head north?
Our more highly efficient kitchen can increase peak hourly throughput by 36 percent. We can now do in a much smaller space what we used to do in a larger space, so the economics make more sense.
The new restaurant design was first introduced at the Destiny USA mall in Syracuse, N.Y., [and we have seen] comp sales up 22 percent and peak hour sales increase by a similar amount.
The mall is still brimming with a lot of people, though it may be less than it once was. So we have a model that is more competitive. Most people may not be driving to the mall just to eat at Johnny Rockets, but we are more competitive in the mall because our new design makes us more attractive, the ambiance has been upgraded and the food service is quicker.
“Better equipment means higher efficiency.”
How much quicker?
Burgers that used to take five minutes to cook now take about one minute. Better equipment means higher efficiency.
Does it still look like a Johnny Rockets?
Of course. We call the new design Diner 2.0. There are several areas that we improved. The decor and ambiance are more inviting. It appeals to Millennials but gives a nod to the history of Johnny Rockets. We still have a lunch counter with stools, but we modernized with warmer colors and distressed wood.
Anything else getting a re-do?
Just about everything. We changed our plateware, our silverware, our glassware, our coffee cups, our salad bowls — even our paper goods. It’s more akin to a sit-down restaurant. We wanted an upgrade of the experience …. Everything the guest touches will be nicer.
Were prices upgraded, too?
No. The prices remain the same.
"We hope the new design will be more attractive to Millennials even as it helps us hold on to Boomers.”
It sounds like Johnny Rockets 2.0 is trying to appeal to Millennials and Boomers with the same concept.
We are cognizant of the importance of Millennials globally, but the look and feel is designed to appeal to Millennials, Gen X and Boomers. We hope the new design will be more attractive to Millennials even as it helps us hold on to Boomers.
How does all of this square with the new Johnny’s Burger Factory concept that you’re testing in Buffalo?
While we haven’t stepped away from the Burger Factory test, the 2.0 concept is seeing such strong sales that it’s our focus right now. It’s very clearly a home run and we want to do all we can to expedite that.
Where is 2.0 going to show up?
Certainly at major malls in the United States, and globally. We’re pretty excited about our outlet partnerships, too, but we’re not stepping away from traditional malls. We will open about 60 percent at traditional malls and 40 percent in outlets. We think we’ll open 70 restaurants globally this year, and at least 14 of them will be at malls.
Isn’t Johnny Rockets also testing some drive-throughs, too?
Yes, we want to be the first quick, casual burger chain to offer a drive-through. We just opened our first one in Mooresville, N.C., and our second will open in El Paso, Texas. We don’t start your meal until you drive up to the order screen. The trick is being able to execute, in three minutes or less, a true, high-quality burger. We’re not putting all of our eggs in one basket, but this is another growth vehicle.
Are these changes a response to tougher competition from the likes of Shake Shack?
The competition in the burger space is very strong, but we look at ourselves a little differently. Shake Shack has a great burger, but I wouldn’t say they have a great experience. We also focus on the experience. And we have great food across the menu — not just one item.
So, no, this is not a response to competition. It’s a response to make sure we remain as relevant as possible with our core consumer.
Millennials want new technology and convenience. What’s new there?
A new app with online ordering will roll out later this year. We’ll have digital, tabletop technology next year. We don’t love what’s readily available, so we’re taking our time to do something unique.
We have food trucks running outside the U.S. market and one under construction in the U.S., tentatively scheduled for the New York City market in September. The menus are limited to core elements; burgers, shakes and fries. They go to sporting events, concerts or catering venues. It’s all about getting closer to our guests.
What about the menu for Johnny Rockets 2.0? Any big changes there?
No, the menu doesn’t change. Johnny Rocket’s 2.0 is about upgrading the service. But we are doing a much more aggressive “Limited Time Only” program. There’s always “new” news at Johnny Rockets.
How has the business changed since Johnny Rockets opened 30 years ago?
The whole restaurant business has matured to a point where Americans understand all of the different categories of burgers. It’s much more about quality and experience now. I see that as a positive.