Cava focuses on suburban growth as the pandemic changes consumer trends

Guess who is moving to the outskirts now?

The Covid-19 pandemic set in motion several trends that can alter the restaurant space even after the vaccines are widely administered and life returns to normal. From the migration out of dense cities to the suburbs, to the greater confidence in the digital order of collection, sidewalk and delivery, the space continues to evolve and the Mediterranean chain Cava is committed to all this.

The restaurant’s mother, Cava Group, acquired Zoe’s Kitchen in late 2018, making the company private. The group said its new 288-store real estate portfolio allows it to expand into new suburban markets more quickly, as it can turn a Zoe’s into a Cava location in half the time it takes to open a new restaurant and a lower cost. .

Last year, the Washington, DC-based company made seven conversions of Zoe’s locations and there are 12 under development by 2021. About 80% of Cava’s locations are in suburban markets.

“We see the ability to unlock significant revenue growth in Zoe’s real estate when we convert them to a Cava location,” Schulman said. As a private company, Cava does not publicly report its annual revenue.

Cava, which also has a consumer packaging business that sells drops and casts to Whole Foods and other specialty markets, has seen its restaurant business move from a lunch-to-dinner approach, he told CNBC on general manager Brett Schulman.

“When serving a suburban client, whether a family or a couple or singles living in the suburbs, [you need] to be relevant to your needs at both lunch and dinner. I think that’s really important when you’re in the suburbs, ”he said.

Cava is not the only chain looking for opportunities in the suburbs. Chipotle has been successful with its “Chipotlanes,” traffic lanes reserved for picking up mobile orders and sees a greater opportunity to build them in suburban and rural communities, the company said. The burritos chain expects approximately 70% of its new stores this year to have these lanes.

Shack Shack recently said in its earnings report that suburban shacks performed better than those located in cities. And Starbucks is expanding its drive-thru portfolio in the coming years as it closes some underperforming locations and opens new smaller pickup stores in cities and drive-thrus in suburbs.

Cava also has second digital and off-premises kitchens at all the restaurants that prepare food for online orders, something Chipotle has known as its digital business has grown.

Digital revenue at Cava has grown 140 percent year-over-year, and 30 percent of total revenue comes from digital channels that didn’t exist before Covid, including on-edge distribution, Schulman said.

“I think that’s been one of the things we were able to do, have what I call ‘digital agility’ at Covid. We have an in-house engineering team and those capabilities allowed us to defend those channels quickly and create those access-based points. in the needs of Covid consumers, ”he said.

And the brand is poised to return to on-site food later this year, but Schulman hopes to be in all locations (on-site and online) will help bolster the consumer experience.

“We’ve really focused on hospitality, it’s a core aspect of our brand and the people who have that commitment, walk the line with our team members [in stores] and combine these physical and digital channels. So if you want to engage with us through our digital channels or through our physical channels, that hospitality is the core, ”he said.