While navigating the past year, restaurant operators have had to deal with countless unforeseen challenges.
Jason Westhoff, president of Cousins Subs, discusses how this Wisconsin-based sandwich chain with locations across three Midwestern states navigated the twists and turns of the pandemic and offers a glimpse into the future.And when an operation spans multiple states, counties and municipalities, well, those challenges only multiply. As the U.S. economy starts to exit the pandemic and the operating environment improves for restaurants and other foodservice operators, there’s plenty of reason for optimism moving forward.
How has Cousins Subs adapted its business to deal with the restrictions imposed to slow the spread of COVID-19? What aspects of the business already in place helped weather the pandemic? What changes did Cousins Subs have to make to its stores to be able to adapt?
The biggest thing that was in place was taking over the management of the POS system and the back-office software. We basically replicated every store’s POS and back-office software to be the same. The vendor partners were all the same in every store. And if anything goes wrong, the operators just call our help desk. So we knew what our capabilities were. This made it easier for us to go to curbside delivery and pickup, the latter of which allows customers to order in advance, pay and come into the store to get their food and leave. We had the systems in place to distribute and set up all the signage in the stores. We knew it was the right business decision, but we did not know the benefit it would have in a pandemic.
Often the operating requirements would differ from state to state or in some cases states might have one set of guidelines and counties or cities something slightly different. Did you encounter anything like that? If so, how did Cousins Subs handle that?
We operate in Wisconsin, Illinois and Indiana. Chicago was the hardest hit for our corporate stores. They were closed and kept closed. The cost of opening and getting business was far more expensive. It had its major ebbs and flows, and we left it up to the local restaurateur to make decisions and we offered advice as needed. Indiana mostly followed suit with Illinois. Wisconsin was different because each municipality had its own regulations and then the governor wrestled control away. I try to plan for the least common denominator. And Chicago allowed us to do that because it had the most restrictive environment and we were able to pare back in other areas.
Of the changes Cousins Subs has made during the pandemic, which ones will stick?
Drive-thrus are big right now. Eight years ago, we started our rebranding and saw a 20% to 30% increase in sales at our units with drive-thrus. It’s kind of a no brainer once you start to see the numbers. But we are a 50-year-old brand and we have a lot of assets that can differ greatly.
From a consumer standpoint, it's convenience. They are enjoying convenience in our sector and others. Prior to the pandemic, 15% of our guests were dine-in guests and during the pandemic it went down to zero. So that revenue shifted to the drive-thru and third-party delivery. The biggest thing is really all about the convenience. The guests who were seeking convenience are willing to pay for it.
From a design perspective, I want to standardize all of the stores to have that Milwaukee sub shop look. Milwaukee was founded on industry. Lake Michigan and the rivers were the sources of everything we did. A lot of what they used in the stores was made from local rock like cream city brick. So some of our surfaces emulate that look. And the color palette went away from the yellows and reds and brought it more to earth tones. And when we rebranded we brought back our old logo and did so in a way that looks ahead but also pays homage to the history.
How did the pandemic shape Cousins Subs’ growth plans? With city centers and major downtown areas still operating at reduced capacities, will the company target more suburban areas for the time being?
Looking specifically at the business districts, we only had one in Chicago’s Loop and we had a commissary in downtown Milwaukee. Prior to the pandemic we had shifted to that commissary unit because our downtown Milwaukee locations were not performing the way we wanted and we wanted to go more toward delivery. In the first 12 weeks of the pandemic I was not sure if we were going out of business. We took some pay cuts at headquarters but did not do that at the stores because we knew we were going to need our stores.
Our sales are picking up because of the number of competitors no longer with us or who have not yet chosen to reopen. We are bullish on development, including opening stores and buying stores. We even had a franchisee open a store during the pandemic in Illinois. Right now we are spending a lot of time looking for markets we can expand to in Wisconsin and the Midwest via corporate locations if we can’t find the right franchise partner. You can find an inline space pretty cheaply right now. The opposite is the case with the drive-thru units.
What excites you about the company and its future?
I feel we are in a position to strike when an opportunity presents itself. When I came here eight or nine years ago that was not the case. On the menu, we have grilled and cold products. We have cheese curds. Shakes. We have lots of offerings our competition does not provide. We have quality food. As we continue to build out our stores and with each new remodel we continue to see strong performance. We bought back two markets – Green Bay and Sheboygan – from our franchisee and are remodeling those stores. From a sales standpoint, last year we were up 7% from the prior year. And since the beginning of this year, our comp sales are up 23%. Traffic counts are up in double digits, too. So our guests are really rewarding us for staying open.