Following Chuck E. Cheese parent company CEC Entertainment’s suspension of on-premises activity the company now expects this interruption to extend until at least April 10.
Initially, all the company’s 551 Chuck E. Cheese and Peter Piper Pizza venues remained open for carry-out and third-party delivery. CEC has now suspended all operations in 38 venues, primarily due to sales performance and mall closures stemming from the pandemic, and it is considering suspending all operations at approximately 50 additional venues next week.
For Chuck E. Cheese, third-party delivery and carry-out have not been a key strategy, CEC revealed in a statement. “However, to retain key personnel (such as venue general managers) and generate some level of revenue, the company has shifted its focus to carry-out and third-party delivery business via third-party services offered by DoorDash, Uber Eats and GrubHub. Peter Piper Pizza continues to offer carry-out and third-party delivery via DoorDash and Uber Eats and has debuted additional value-priced packages during this time,” it said.
The company has taken several actions to mitigate the impact of venue closures, including reducing hours of operation and staffing levels at the venues, furloughing over 50 per cent of its support centre personnel, suspending all discretionary spend and reducing capital expenditures. In the near term, the company expects each venue to sustain a loss while on-premise dining, entertainment and arcade rooms are closed.
It is also withdrawing its guidance on expected capital expenditures for fiscal 2020 provided on its fourth quarter 2019 conference call and in its annual report for the year ended December 29, 2019.
In the first quarter, traditionally CEC’s busiest quarter seasonally, comparable venue sales up to March 26, 2020 are down approximately 18 per cent on last year’s period and down approximately 43 per cent for the month to date.
Venue sales from March 17, when on-premise dining and game play were suspended, through to March 26, 2020 are down approximately 94 per cent.
