HUNTINGTON BEACH Calif. BJ’s Restaurants Inc. said Thursday that lower-than-expected commodity costs for the year ahead will help the company keep menu pricing down at its 82 casual-dining restaurants.
BJ’s expects its commodity costs to rise in 2009 by about 3 percent, which is lower than the company’s previous estimate for an increase between 5 percent and 6 percent.
The lower food costs will help BJ’s restaurant continue to provide an upscale casual-dining experience for about the same average check as the larger, bar-and-grill casual-dining chains, the company’s chairman and chief executive Jerry Deitchle said.
“To the extent that our costs for key inputs such as food commodities continue to be lower than expected, we will be able to better protect our ‘value concept’ positioning with consumers and thereby keep our expected menu price increases as small as we can,” he said.
Many restaurant operators have cited lower year-to-year increases in commodity costs — whether because of market conditions or supplier negotiations — as a silver lining to an expected tough 2009.
BJ’s also said Thursday it expects to open between nine and 11 new restaurants this year, which is down from 14 openings in 2008. The company cited the current recession as well as a slowdown in new retail project development as drivers behind the chain’s decelerated growth.
BJ's said its development in 2009 would be financed with its cash flow from operations and committed landlord construction contributions.
“Our goal is to preserve as much of our investment balances on hand and our borrowing capacity as we can for potential future deployment when the recessionary cycle begins to abate,” Deitchle said.
BJ’s finished 2008 with a 16.5-percent increase in its fourth-quarter revenue to $99.3 million. Same-store sales fell 0.7 percent. For the full fiscal year, revenues increased 18 percent to $374.1 million and same-store sales fell 0.3 percent.
The company said it would record a pre-tax charge of $2.1 million in the fourth quarter of 2008 for compensation and benefits related to the December 2008 retirement of the company’s two co-founders, as well as estimated costs to settle two California employment practices lawsuits that date back to 2004 and 2005.
The release of BJ’s full-year earnings is expected next month.