As we reported in our previous blog, Chuck E. Cheese’s (CEC Entertainment) saw a 3.9% increase in comparable store sales during the last quarter of 2010. Probably all of this increase was due to the increases in the birthday party revenue: +17% during the 4th quarter. This came on the heels of a 16% increase in birthday party revenue during the 3rd quarter. The company credits the birthday party increases to the rollout of their new ticket blasters that were introduced in June 2010 and a 100-token bonus promotion to shift more parties to Friday and Sundays.
The company reported the following operating costs for the 4th quarter:
- COGS for food & beverage – 23.6%
- COGS for entertainment and merchandise – 8.1%
- Labor 29.9%
- Advertising 4.4%
- General and administrative – 7.3%
During the 1st half of 2011, CEC is rolling out a new enhanced pizza with a crispy crust. The dough will be made fresh in the stores and the pizzas will feature real mozzarella cheese that will come to the stores in large blocks and be grated fresh. The company did extensive market and focus group research in developing the new pizza.
CEC plans to spend $63 million during 2011 in North America to expand 30 to 35 stores, remodel 15 to 20 stores, add game enhancements to stores and to continue to open new stores that will average 15,000 square feet in size. They are also aggressively pursuing their international franchise program.