Yesterday Dave & Buster’s reported record revenues in the third quarter, up 12.9%. Sounds all rosy, but it really isn’t when you drill down into the results. The revenue increase is attributable to an increase in the number of stores. And even with the increased revenues, net income decreased by 2.5%. Even more telling is that comparable store sales declined 1.3% compared to the same quarter one year ago. However, that does to reflect inflation. With inflation factored in, the comparable store decline is more like 3%.
The comparable store sales decline was driven by both a decrease in walk-in and special event sales.
As we reported in the November issue of our Leisure eNewsletter, Dave & Buster’s is experiencing a long-term trend of comparable store declining food and beverage sales that started in Q4 of 2016. The just reported results for the last quarter continue that trend with a comparable store sales decline of 5% for food and beverage, which declined to 42.1% from 43.1% of all revenues one year ago.
Today the success formula for eatertainment venues such as Dave & Buster’s is great food and drink – high quality, scratch-kitchen, fresh and innovative – combined with noteworthy, memorable experiences. Food and drink have taken on an importance even greater than the attractions and games at eatertainment venues. So as a result of Dave & Buster’s out-of-date food offerings, consumers are either just staying home or visiting other leisure and eatertainment options such as the new school eatertainment chains such as Top Golf and Punch Bowl Social, both of whom have far superior food.