EXECUTIVE INSIGHTS | Kevin Santos, Australia

Banjo's Bakery finds opportunity in vacated establishments to fuel drive-thru growth

Managing director Jessica Saxby also reveals plans to deeply bolster its off-premise arsenal.

Dine-in adjustments and operational procedures aside, Banjo’s Bakery says the ‘new normal’ hasn’t forced them to significantly alter their business model - a unique case amidst a sea of chains forced to pivot in some way, shape or form due to the coronavirus pandemic.

Launching their first drive-thru store in Queensland at the beginning of the pandemic, the option for customers to stay in their car was conveniently timed and supported sales during a difficult period of transition from dine-in to takeaway. The whole business itself experienced a 10% year-on-year increase in like-for-like sales.

“It's been challenging, but it's been good. We've been able to adapt the business model and give the employees and customers a good feeling that it's okay to shop with us,” managing director Jessica Saxby told QSR Media in an exclusive interview.

Ensuring customers were comfortable was also a main driver of Banjo’s agile investment in additional off-premise channels.

The chain was already an Uber Eats partner, but says it’s scoping partnership with Menulog, Deliveroo and Doordash. Banjo’s is also working on an app for click-and-collect and plans to have their own delivery platform.

The early days of the pandemic also saw Banjo’s experience a “significant increase” in bread consumption, with less consumers going to supermarkets for daily needs. “Customers probably feel a little bit safer shopping in a smaller shop as opposed to going to a supermarket where there are quite a lot of people,” she said.

“They definitely gave us a whole bunch of new customers. But I also think that we've been very heavily involved in the communities that we're in. We support a lot of charities. We support a lot of schools. We support a lot of local farmers. Having the support of the community pays off.”

In contrast, the business experienced a decline in breakfast and coffee sales, with Saxby attributing it to people having more flexible working arrangements.

Saying no to supermarket partnerships
Product development-wise, Banjo’s continues to increase their menu, offering new pies with experimental flavours. The business has also been doing bundling, as customers opt for more value choices. However, Saxby also dismissed the idea of partnering with supermarkets for better reach, arguing it will compromise the quality of their product offering. 

“If we were to put it on that type of scale, you start to lose the uniqueness about it and it starts to become a little bit too mainstream and I think quality gets sacrificed at that level when it gets put in manufacturers’ machines,” she explained, “Our product is handmade and customers appreciate the product being made by hand, it tastes different.”

Banjo's Bakery revealed that drive-thru makes up 30% of total sales since the pandemic hit. Photo: Supplied

Queensland expansion planned for 2021
Banjo’s originally wanted to almost double their store count by 2025, but Saxby admitted the pandemic put them almost a year behind schedule.

The chain has opened four of its drive-thru stores this year despite the adjustments, and has earmarked at least four to six locations for QLD in 2021. Saxby remains positive, however, opting to focus on their self-raising programme where employees are developed to be potential store managers or franchisees and finding better locations to achieve their growth plans.

“There were sites that weren't available 12 months ago that are now available because a lot of businesses have chosen not to grow or they pulled out of sites,” she said. “Rent seems to be dropping as well as people seem to be moving out or not renewing their lease agreements. So there's definitely a huge opportunity in that.”

Now, Saxby says they are after sites around 250 square meters and near petrol stations, shopping precincts, highways and even near QSRs themselves.

“We're happy to be partnered up with KFCs [and] Zarraffa’s because we actually believe we don't see them as competitors. We see it as an advantage to the business they know it’s a drive-thru area...we’ve done really well in those situations.”

Looking ahead, Saxby expects consumers to be more cautious and seek more convenience. CBD stores, she noted, are “certainly going to suffer” and take more time to recover.

“Regional stores are going to do a lot better than [as] people are starting to work from home, I think the city-centric stores will slowly recover. I don't think they'll recover as fast,” she said.

“It's just that we've had to add some more online ordering platforms, we've had to develop our own platform, ensuring that we've got click and collect, just to make people feel more comfortable.”

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