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Chuck E. Cheese’s sees benefit from game shift

‘All You Can Play’ differentiates brand, CEO Tom Leverton says

CEC Entertainment Inc.’s offering of “All You Can Play” as an alternative to per-token-based games helped the Chuck E. Cheese’s brand build traffic and improve guest value scores, the company CEO said.

“All You Can Play, even without significant advertising, yielded positive dollars,” said Tom Leverton, CEC CEO, on an investor call Friday. “It will take time to build,” he said, as it is an "unique offering” among family entertainment centers.

In early July, after a test in about 100 stores, CEC expanded time-based game play as an alternative to tokens and points at its company-owned Chuck E. Cheese’s locations, which included more than 500 of the brand’s 608 units. 

The “All You Can Play” platform allows for unlimited play, starting at $9 for 30 minutes. Parents can buy time instead of tokens or points and the time is for all games, any day of the week. The offer is also for walk-in guests.

Users can also “pause” their time up to two times for meal or restroom breaks. Gaming tokens range in price from 20 cents each for 150 tokens, or 25 cents each for 40. Games require varying amounts of tokens to play.

“We are hopeful this will be a permanent differentiator for Chuck E. Cheese’s,” Leverton said, and the new offering already has affected customers’ value scores.

“Our research indicates that guest value perceptions improved in test stores despite maintaining or growing average ticket, confirming the great value of this offering,” he said.

In the first quarter, Chuck E. Cheese’s introduced a new birthday package that included the brand’s signature mouse character and customized cakes, Leverton said.  

“We continued to see strong performance in our birthday business in Q2,” he said, adding that birthday celebrations make up about 15 percent of the brand’s sales.

The company has completed the first two of 25 planned remodels that are expected to be finished this year, each with an average $500,000 in capital spending. This year’s store remodels in El Paso, Texas, and Lake Charles, La., “are performing very well,” Leverton said. 

For the second quarter ended July 1, CEC’s loss widened to $9 million from $5.9 million in the same period last year. Revenues were up 2.6 percent, to $217.4 million, from $211.8 million in the same quarter last year. 

Same-store sales were up about 1 percent in the quarter, the company said.

CEC, owned by Apollo Global Management LLC, has a system of 755 locations, including 608 Chuck E. Cheese’s and 147 Peter Piper Pizza units. 

Chuck E. Cheese’s ranked No. 62 in Nation’s Restaurant News’ recent Top 200 report, with $838.3 million in U.S. systemwide sales.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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