How Dave & Buster's Revenue Mirrors Foot Traffic Patterns

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A popular “eatertainment” destination in the casual dining segment, Dave & Buster’s offers its customers an interactive dining experience that is equal parts restaurant, arcade, and bar. While traditional casual dining restaurants focus primarily on the culinary experience, Dave & Buster’s seamlessly combines good food with vibrant entertainment. Restaurant patrons typically enjoy a delicious meal before adjourning to play video games or billiards, or to watch the latest game over drinks at the bar.

Foot traffic data, collected through smartphones and processed through Unacast’s rigorous cleaning and machine-learning platform, reveals the places people go in the physical world. It can be a powerful indicator of overall business performance, particularly for businesses in industries where total sales are closely tied to in-person consumer visits. One such example is the casual restaurant industry, where restaurant revenues are directly related to the number of visitors that walk through the front door.

The Relationship Between Foot Traffic and Revenue

Consider the graphic below, which shows both revenue and foot traffic data for Dave & Buster’s restaurants between Q1 2019 and Q3 2023. At a glance, you can see how closely the chain’s overall foot traffic pattern mirrors its quarterly revenue results.

The correlation analysis below further demonstrates how closely foot traffic and revenues are related for Dave and Buster’s, alongside other casual dining restaurants Cracker Barrel, Chuy’s, Denny’s, and Texas Roadhouse. Interestingly, the correlation between foot traffic data and revenue for Dave and Buster’s (R-squared =.3) is the weakest among the restaurant brands we studied. Why might this be the case?

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While all of these brands successfully compete in the casual dining restaurant industry, each of these brands has a unique business model. Revenue at these restaurants is generated not only through food and beverage sales, but also merchandise, online orders, gift card sales, or in the case of Dave and Buster's, game tokens. As a result, the correlation between foot traffic and revenue can vary, even within the same industry.

Same Industry, But Serving Very Different Customers 

Other factors can influence the relationship between foot traffic and revenue and contribute to shifts in R-squared values over time, too. The economic impact of the pandemic, for example, ushered in record-setting inflation that caused the price of daily needs like food and fuel to skyrocket. More affluent consumers might have been less impacted by these price increases, but cost-conscious consumers had to rework their budgets in order to stay on track. 

Consider the chart below, which shows the income breakdown of customers at Dave and Buster’s alongside the other casual dining restaurants shown above. There are significant differences in average annual income across each brand’s customer base. A larger percentage of people with annual incomes below $50,000 visit the buffet-style restaurant, Denny’s, compared to its competitors, for example. At the other end of the spectrum, Chuy’s and Dave and Buster’s attract far more customers with incomes of $125,000 or higher.

While the income demographics at each brand did not change materially between 2019 and 2023, it stands to reason that brands like Denny’s, which serve more lower-income consumers, faced a different set of challenges in the wake of rising inflation than those serving customers in higher-income brackets. Denny’s Original Grand Slam breakfast promotion, priced as low as $5.99 in some markets, is clearly targeted at more price-sensitive customers with the goal of bringing them back to its restaurants. This underscores the importance of factoring current market conditions into any analysis.

Using Location Intelligence and Foot Traffic Data in 2024

Unacast’s highly accurate location analytics, including demographic and trade area insights, let businesses understand how foot traffic influences revenue but also gain a deeper understanding of their customer base. Foot traffic data is not only a powerful indicator of business performance and consumer engagement but also of broader market trends. 

In 2024, foot traffic will be an essential data source for restaurants, retailers, municipalities, and investors who need to understand how people move in the physical world. For more examples and a detailed discussion on using foot traffic data to predict revenues, be sure to download our latest report, Does Foot Traffic Predict Business Performance?

Unacast’s recent merger with Gravy Analytics brings an additional layer of data science expertise to our team, making Unacast one of the most advanced location intelligence providers in the world. If you’d like to learn more about using location intelligence in your business, request a consultation today.

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