Cava Bucks Restaurant Industry Blues, Showing Double-Digit Growth

Mediterranean fast-casual restaurant Cava appears to be outperforming many competitors in a struggling restaurant sector, exhibiting signs of strength as the year draws to a close.

According to Investopedia, Q3 results released Nov. 12 for the company drove share prices up 17% the following day. Reporting a net income of $18 million on revenue of $241.5 million, Cava beat analyst expectations and saw a significant boost in same-store sales volume (up 18.1%).

Raised Menu Prices, Loyalty Programs Fueling Growth

While fast-food competitors such as Burger King and McDonald’s are doubling down on value-menu offerings in order to regain their footing after seeing sales dip year-over-year, per Reuters, Cava is following a different playbook by increasing prices.

That move seems to have paid dividends, as Restaurant Business reported. Breaking down the quarterly same-store sales increase of 18.1.%, Cava highlighted that 5.2% of that figure came from an increase in menu prices as well as product mix. The remaining 12.9% resulted from an uptick in overall traffic to the company’s locations.

Focusing on the human element — a mission to bring “heart, health, and humanity to food,” as Regional Director Nick Sickler stated, per KCTV — rather than merely transactional business operations, Cava seems to be taking its branding seriously.

“Our business is built on the idea of welcoming everyone to our table, and we are focused on creating the authentic human connections consumers are hungry for,” CEO Brett Schulman said during a Nov. 12 earnings call.

Schulman also pointed to the success of Cava’s loyalty rewards program, launched in tandem with the initial rollout of the company’s famous Garlic Ranch Pita Chips, as indicative of the brand’s continued success with consumers. According to Schulman, loyalty sales as a percentage of revenue shot up by 200 basis points.

Gen Z and Gen Alpha Showing Interest in Cava’s Brand and Socials

Cava also appears to be doing well with a few prized demographics — namely members of Gen Z and Gen Alpha.

“We’ve seen great growth in brand awareness in Gen-Z and even Gen Alpha customer segments, given some of the momentum we have on social channels,” Schulman said during the earnings call.

Whether that’s a result of a commitment to “Project Soul,” which Restaurant Business detailed as a more mindful and soft aesthetic involving “pillows, plants and other comforts,” or empowering workers to press the “Love Button,” which means a free meal can be offered to those who appear to need it most, or something else entirely, Cava’s strategy seems to be working.

“Cava is increasingly attracting a wider customer base — the median household income of its captured market has fallen steadily since 2021, and its visitor base increasingly includes younger consumer segments,” a recent Placer.ai blog post outlined.