Vol. XXIV, No. 2, March-April 2024
Dave & Buster's same-store sales have declined since 2019
Dave & Buster's reported that their fourth-quarter sales for their 2023 year ending February 4, 2024, were up 8% compared to the pre-Covid fourth quarter of 2019.
However, there has been significant inflation since 2019. Restaurant inflation has been 26% over those four years, while out-of-home entertainment inflation has been 19%.
Financial results don't tell the whole truth during periods of high inflation. Due to inflation, a dollar of sales in Q4 2023 is not worth as much as in Q4 2019. The U.S. Bureau of Labor Statistics reports that inflation between December 2019 (midpoint in the 4th quarter) and December 2022 was 19.4% (lower than restaurant inflation). That exceeds the 8% increase in the same store sales D&B reported. In reality, their same-store sales have declined by about 10% compared to the prepandemic 4th quarter when adjusted for inflation.
This is most likely due to their location-based entertainment model being outdated. D&B has initiated a remodel program. Their first "Store of the Future" in Friendswood, Texas, saw a 30% increase compared to 2019, surpassing inflation by 11%.
In addition to an evolved food menu with a focus on sharable options to increase social experiences, the new format includes "Interactive Social Bays" - both "Social Darts Bays" and "Social Shuffleboard Bays" that offer private, reservable spaces in suites for two to six players where guests can engage on social games while enjoying food and beverage (social gaming).
To learn more about D&B's Store of the Future, read:
Implications:
The decline of their traditional format stores could indicate that, at least for adults, game rooms that only offer a solo experience, not a communal social one combined with food and drink, are losing their appeal and that social gaming eatertainment formulas are the future for adult-oriented location-based entertainment venues.
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