Cava sets its sights on suburban growth as the pandemic changes consumer trends

Guess who’s moving to the suburbs now?

The Covid-19 pandemic has set in motion several trends that will change the restaurant space even after vaccines are widely administered and life returns to a new normal. From the migration from densely populated cities to the suburbs, to a heavier reliance on digital orders for pick-up, curbs and delivery, space continues to evolve and the Mediterranean chain Cava counts on all of the above.

The restaurant’s parent company, Cava Group, acquired Zoe’s Kitchen in late 2018 and took the business privately. The group said its new real estate portfolio of 288 stores will allow it to expand faster into new suburban markets as it can convert a Zoe’s into a Cava location in half the time it takes to establish a brand new restaurant. open – and at a lower cost. .

Last year, the Washington, DC-based company completed seven conversions of Zoe’s locations, with 12 in development for 2021. Approximately 80% of Cava’s locations are in suburban markets.

“We see the opportunity to achieve significant sales growth in Zoe’s real estate when we convert it to a Cava location,” CEO Brett Schulman told CNBC. As a privately held company, Cava does not publicly report its annual earnings.

Cava, which also has a consumer packaged goods business that sells dips and spreads on Whole Foods and other specialty markets, has seen its restaurant business shift from a focus on lunch to dinner, Schulman said.

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

Cava isn’t the only chain looking for suburban opportunities. Chipotle has seen success with its “Chipotlanes,” drive-thru lanes reserved for picking up mobile orders, and sees a greater opportunity to build them in suburban and rural communities, the company said. The burrito chain expects about 70% of its new stores to have these jobs this year.

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

Cava also has second digital and remote kitchens in every restaurant dedicated to preparing food for online orders, something Chipotle has become known for as its digital business boomed.

Digital sales at Cava are up 140% year over year, and 30% of total sales come from digital channels that didn’t exist before Covid, including roadside delivery, Schulman said.

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

And the brand is geared up for a shift to on-site dining later this year, but Schulman expects a presence in all locations – on-site and online – will help enhance the consumer experience.

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