Nation’s Restaurant News magazine and WD Partner’s undertook a comprehensive study of customer attitudes toward 139 different restaurant chains. Eight different dimensions of attribute were measured. One common theme emerged for all types of restaurants, the relative unimportance of value compared with other attributes. Consumers said attributes such as cleanliness and food quality were more important to them than value.
In the Limited-Service Pizza/Italian restaurant category that covered eleven restaurant brands, Chuck E. Cheese’s had the lowest rating of all the brands in five of the seven attributes measured and came in second lowest in Likely To Recommend or Likely to Return (Sbarro had the lowest score for each).
The chart below shows the scores. Scores are based on the percentage of respondents who choice 1 or 2 out of a five number scale with 1 being the highest rating.
It is amazing that with such poor ratings CEC Entertainment, the owner of the vast majority of Chuck E. Cheese’s and the franchisor of the rest, is so profitable with consistent EBITDA’s in the mid-twenty percentages and good cash flows. You would think with Chuck E. Cheese’s low rating on cleanliness that mom’s would keep their children away in droves.
The explanation for CEC’s success is probably attributable to the fact that it ranked higher than any other chain in its category for atmosphere. Atmosphere to the survey respondents most likely reflects the entertainment, the games. It appears that the presence of the entertainment, which generates approximately 50% of CEC sales, has an appeal to customers that overcomes CECs other shortcomings. That would make CEC’s formula, ‘Come for the fun and stay for the food, even though our food isn’t good quality, we don’t offer great value and we aren’t the cleanest restaurant in town.‘ Sounds a little counterintuitive, but their eatertainment formula does work.
Chuck E. Cheese’s is working on improving their food quality, as they have rolled out a new fresh dough pizza. If the pizza is improved, it should also increase their value perception.
About Randy White
Randy White is CEO and co-founder of the White Hutchinson Leisure & Learning Group. The 31-year-old company, with offices in Kansas City, Missouri, has worked for over 600 clients in 37 countries throughout the world. Projects the company has designed and produced have won seventeen 1st place awards. Randy is considered to be one of the world's foremost authorities on feasibility, brand development, design and production of leisure experience destinations including entertainment, eatertainment, edutainment, agritainment/agritourism, play and leisure facilities.
Randy was featured on the Food Network's Unwrapped television show as an eatertainment expert, quoted as an entertainment/edutainment center expert in the Wall Street Journal, USA Today, New York Times and Time magazine and received recognition for family-friendly designs by Pizza Today magazine. One of the company's projects was featured as an example of an edutainment project in the book The Experience Economy. Numerous national newspapers have interviewed him as an expert on shopping center and mall entertainment and retail-tainment.
Randy is a graduate of New York University. Prior to repositioning the company in 1989 to work exclusively in the leisure and learning industry, White Hutchinson was active in the retail/commercial real estate industry as a real estate consultancy specializing in workouts/turnarounds of commercial projects. In the late 1960s to early 1980s, Randy managed a diversified real estate development company that developed, owned and managed over 2.0 million square feet of shopping centers and mixed-use projects and 2,000 acres of residential subdivisions. Randy has held the designations of CSM (Certified Shopping Center Manager) and Certified Retail Property Executive (CRX) from the International Council of Shopping Centers (ICSC).
He has authored over 150 articles that have been published in over 40 leading entertainment/leisure and early childhood education industry magazines and journals and has been a featured speaker and keynoter at over 40 different conventions and trade groups.
Randy is the editor of his company's Leisure eNewsletter, has a blog and posts on Twitter and Linkedin.
