Cava CEO Brett Schulman explains the restaurant chain’s no-discount strategy.
Cava distinguishes itself from competitors with a unique strategy: no discounts.
The Mediterranean chain, which has launched hundreds of locations across the country since its founding nearly a decade ago, is sticking to this strategy, claiming it doesn’t need discounts to drive traffic in the short term.
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But Schulman said Cava has consistently made it clear on its earnings calls that this is not the strategy the company plans to follow.
He said these temporary discounts do not build long-term customer relationships or “communicate the differentiated value of what we market and serve to our guests every day.”
Cava bags outside the company’s restaurant in New York’s Brooklyn neighborhood. (Gabby Jones/Bloomberg via Getty Images)
“You can’t discount your path to prosperity,” Schulman said. “We want to invest in our guests for the long term and continue to deliver stronger everyday value.”
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It’s a significantly different perspective than the industry that relies heavily on discounts and aggressive price promotions to drive traffic among price-conscious consumers.
After McDonald’s relaunched its Extra Value Meals in September, a slew of competitors began stepping up their value game by rolling out their versions of an affordable bundle or promotion.
The inside of a renovated Cava restaurant. Cava is upgrading the interiors of its restaurants under a plan called ‘Project Soul’. (Cava)
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The fast food sector has faced a combination of challenges, from margin pressure due to supply chain issues and higher labor costs with minimum wage increases to subdued traffic across the sector. To counter that, many companies started offering deals to attract price-conscious consumers and stabilize shrinking traffic.
But Wasilefsky acknowledged that Chipotle and Cava are outperforming their competitors.
Over the past two years, sales at Cava stores have increased every quarter. Schulman also noted that the locations are opening with sales of more than $3 million, which is a new record for the company.
Schulman said value is not a price, but is created by improving the entire dining experience. Cava’s strategy is focused on offering high-quality Mediterranean cuisine, meeting customers’ current health needs and providing convenience with mobile ordering, drive-thru or delivery.
The company has also focused on creating a comfortable dining experience. The experience of ordering in the store is also important. Schulman said this includes friendly service during the interactive “walk the line” ordering process, generous portion sizes and accurate orders.
The exterior of a Cava restaurant in Detroit. (Cava)
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In the new year, the company also plans to upgrade its spaces with nicer seating, lighting and plants. It also plans to launch new menu items next year, including roasted salmon.
