Wingstop, with its 1,731 global locations, expects to open another 200 eateries in 2022. Pictured is … [+]
Courtesy of Wingstop
For many restaurant chains, the pandemic has either slowed expansion of opening new locations or eliminated it. But don’t tell that to Wingstop, a restaurant chain specializing in chicken wings, that now operates 1,731 restaurants globally. In 2022, it grew its number of locations by 12.5% compared to the previous year, healthy growth during a disruptive pandemic.
Of its 1,534 restaurants in the U.S., found in 45 states, over 90% of them or 1,498 were franchised with only 36 company-owned, so franchising rules at Wingstop. In 2022, it expects to open an additional 200 new units.
Its fourth quarter 2021 earnings issued on February 16, 2022 revealed that Wingstop sales spiked 20% for the full-year to $2.3 billion. Moreover, it opened 193 new outlets for the full-year. Domestic same store sales rose 7.5% for the full-year.
By keeping its menu simple, and by focusing on off-premises sales, Wingstop has managed to grow at a healthy pace, despite the effects of the pandemic.
It has also adapted to offering quick-service meals since 61% of its revenue stemmed from digital sales.
Much of its sales revolve around chicken wings, which constitute about 65% of its overall revenue.
But rising chicken wing prices could put Wingspot’s margins under pressure. Urner Barry’s data reported that prices for jumbo bone-in wings spiked to $2.89 a pound fourth quarter versus $2.05 a pound last year, a 41% year-over-year increase. But Wingstop reported that it increased its prices 28%.
Marisa Corona, Wingstop’s chief growth officer, who is based in Addison, Texas, outside of Dallas, said “this demonstrates the power of our mitigation strategies and our supplier partners’ level of commitment to Wingstop to offer this type of pricing arrangement.”
Moreover, Corona said that Wingstop has been using more parts of the chicken to offset chicken wing pricing spikes. For example, it launched Thighstop, a brand extension through carryout and delivery, to introduce juicy chicken thighs to its menu, she cited.
It has been able to expand at a steady pace because “it was well-positioned for growth. When the pandemic hit, our off-premises sales were 80%. We closed our dining rooms and off premises sales went to 100%,” explained Corona.
Its off-premise sales revolved around carry out and delivery, mostly through its partnership with DoorDash, though it partners with other third-party services where DoorDash isn’t available.
Corona said it keeps its menu streamlined, which contributes to its success. She noted that about 95% of its revenue derives from chicken wings, fries and beverages. “The food is cooked to order, and comes with 11 bold flavors,” she said. Its most popular flavors are lemon pepper, original hot and hickory smoked BBQ.
Asked what a consumer could order at Wingstop who wanted to eat a healthier meal, Corona replied, “It’s an indulgent occasion. Our product is we specialize in chicken wings; that’s what we do.”
In November 2021, Wingstop CEO Charlie Morrison told analysts that the chain had raised prices 10% for the year, compared with a usual 1% or 2% annual increase, to maintain margins. “We did this to protect the profitability of our brand partners,” noted Corona. It hasn’t affected its growth or expansion, she added.
Wingstop also plans to invest over $100 million in marketing in 2002 and $50 million in technology over a five-year period. Corona said its marketing leverages its database of over 27 million users that it can reach on a one-to-one basis.
Corona also attributed much of its growth to the franchisees who operate the bulk of its eateries. “They are our brand partners; they make our growth possible,” she noted. She described the Wingstop culture as being “service-minded, authentic, entrepreneurial and fun.”
Asked why a consumer might stop at a Wingstop, rather than a KFC or Buffalo Wild Wings, Corona deflects the question. She responds that “We’re a category onto itself. Our food is cooked to order—chicken wings, boneless chicken wings, all are made from scratch.”
Yelp respondents at the Wingstop in Buford, Ga, had very mixed reactions. One customer said the staff “was very much focused on getting the order out not only fast but everyone’s food seemed to be coming out fresh and hot.”
But another Yelp customer in Buford was less satisfied, writing that he placed his order at 6 p.m. for an 8 p.m. pick-up, arrived on time and had to wait an hour and then some wings were missing from his order.
Wingstop is dedicated, Corona noted, to “sustained growth. We’ve achieved 18 years of positive same store sales growth, and that momentum should take us into the future.”