Cava closed 2023 with record revenue growth of nearly 60 percent, on top of a 10.4 percent increase in traffic—impressive results as many chains reported a slowdown in traffic due to increased menu prices.
To continue its momentum in 2024, Cava announced plans last Tuesday to revamp its loyalty program and tap into automation and AI to streamline kitchen operations.
A new rewards program is set to launch later this year after more testing.
“We are in the early stages of launching a new program aimed at developing deeper connections with our passionate customer base, creating more frequent, relevant experiences, and further driving traffic, mix, and check,” CEO Brett Schulman said during the chain’s fourth-quarter conference call on Tuesday morning.
The fast-casual chain, known as the Chipotle of Mediterranean cuisines, is testing the new rewards program in the Houston market.
The revamped program is aimed at developing more personal relationships with guests.
Cava is in the early stages of launching a new loyalty program.
Schulman said the chain, which went public last year, wants to leverage its “digital ecosystem for one-to-one communication that can deepen connections with guests.”
The loyalty test includes “new types of rewards to redeem and new ways to engage guests,” Schulman said, adding that the next market testing will occur in the Carolinas.
The chain said changes include “new, more attainable bankable points” that can be redeemed for a range of choices from pita chips to entrees.
“Early results are meeting expectations, and we expect to roll out a new rewards program company-wide at the end of this year,” Schulman said.
The company is also looking at technologies to improve kitchen operations such as food prep. Schulman told analysts that Cava is looking at predictive scheduling, predictive prep, and predictive cook batching tools as part of a “connected kitchen initiative.”
These tools would help with forecasting and order accuracy.
“This is the beginning of a multiyear journey where we see a tremendous opportunity to improve productivity to drive greater operational effectiveness and efficiency by taking a lot of complexity off the team members’ plate,” Schulman said.
Cava closed 2023 with 309 restaurants. Of those, 31 stores have digital pickup lanes.
Cava closed 2023 with 309 restaurants. Of those, 31 stores have digital pickup lanes.
During the conference call, Chief Financial Officer Tricia Tolivar said stores with pickup lanes “continue to look better from an overall AUV perspective and slightly higher from a restaurant-level margin perspective.”
Roughly 36 percent of Cava’s revenue is generated from digital orders. That’s on par with Chipotle, which has rapidly increased the number of stores outfitted with Chipotlanes over the years.
Tolivar said Cava is not feeling pressured to step up the number of stores it has with pickup lanes.
“What we don’t want to do is feel a lot of pressure to really go into a site and compete with a Raising Cane’s or a Chick-fil-A,” she said.
The company said it has a long-term goal of expanding to 1,000 restaurants by 2032.
Cava recently opened a new manufacturing facility in Verona, Virginia. The 55,000-square-foot production facility produces the chain’s dips and spreads for its stores and retail partners. Along with its existing production facility in Maryland, both plants can support at least 750 restaurants and its CPG business, the company said.
Nancy Luna is a contributing writer for Food on Demand. She can be reached at [email protected]
