BJ's Restaurants & DoorDash Tie Up For On-Demand Delivery

BJ’s Restaurants, Inc. (NASDAQ:BJRI) has partnered with technology company DoorDash to initially launch door-to-door delivery at 61 BJ’s Restaurant & Brewhouse locations in 12 metro areas of Northern California, Southern California, Las Vegas, Dallas/Ft. Worth, Houston, San Antonio, Denver, Indianapolis, Washington D.C., Miami, Columbus and Seattle.

Customers can fully customize their orders online or with the tap of the DoorDash app and get BJ’s Restaurant & Brewhouse’s entire menu of food and beverages delivered as late as 1 a.m. in select cities.

Currently, the company operates 194 casual dining restaurants across 24 states in the U.S., under brand names – BJ’s Restaurant & Brewhouse, BJ’s Restaurant & Brewery, BJ’s Pizza & Grill and BJ’s Grill.

It is to be noted that BJ's Restaurants' shares have underperformed the broader Zacks categorized Retail–Restaurants industry in the last six months. While the industry has gained 13.6%, the stock declined 3.6% during the same time period. Soft consumer spending environment in the U.S. restaurant space hurt BJ's Restaurants comps growth and put sales under pressure.



The company is thus implementing several major sales building initiatives in 2017 that have been tested in the last one year in order to navigate the challenging macro environment.

In this regard, BJ’s Restaurants has completed the installation of new slow roasting ovens in all of its restaurants. Also, it has begun using new server hand-held ordering tablets at its restaurants and plans to roll them out at all its locations by mid-August. The company has expanded its daily Brewhouse specials too, which showcase several of its most popular signature menu items at attractive prices.

Moreover, the company had been testing third-party delivery services as part of these initiatives because delivery has become a growing area for the industry driven by ease of access. Notably, DoorDash, which connects customers with their favorite local and national businesses in more than 500 cities across the U.S. and Canada through door-to-door delivery, has similar partnerships with the likes of Dunkin' Brands Group, Inc. (NASDAQ:DNKN) , Jack in the Box Inc. (NASDAQ:JACK) and The Wendy's Company (NASDAQ:WEN) as well.

Hence, BJ’s Restaurants too seems to increasingly focus on this service in order to meet the delivery needs of its new and existing guests and cash in on its tremendously growing popularity.

Meanwhile, given the fact that off-premise sales represent a considerable revenue growth opportunity, the company has been improving its takeout packaging and large party and catering menu options. In fact, BJ’s Restaurants plans on leveraging its excellent mobile app technology and recent infrastructure improvements to its website in order to drive higher off-premise incidents.

Though an uncertain sales environment and a slowdown in the company’s 2017 development plan remain concerns, we expect the roll out of the delivery service to result in increased convenience for customers and add to BJ’s Restaurants top line, going forward.

BJ’s Restaurants currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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