MORNING RANT - The Corporate Follies: Wing Stop Decided to Become “a Tech Company that also Sells Wings,” and Puzzlingly, It’s Now Struggling to Sell Wings

News that a quick-service restaurant chain is suffering from a persistent decline in sales is not necessarily a significant story. At any given time, some restaurant chains are growing, some are stable, and some are in decline. The headlines about Wing Stop’s struggles only caught my eye because there was one near a former office of mine. I liked Wing Stop’s food and I was a frequent customer when there was a convenient location. Now, reading about its current problems, I see that Wing Stop is yet another mismanaged company wishing to be something it’s not. In this case, it’s a fast-food restaurant chain trying to re-imagine itself in the spirit of Silicon Valley.

Quite simply, the wing joint adopted a “digital-first strategy” in 2021, but many customers refused to play along as Wing Stop strove to avoid human interaction with its patrons. As customers were repelled by gimmicks that made ordering food more difficult, Wing Stop’s executives doubled down on their vision of making Wing Stop a tech company. They continued to reject their legacy model of serving wings and fries to customers who simply walk up to the counter and place an order.

Wing Stop’s current predicament is that same-store sales have declined significantly for six quarters in a row, with a cumulative decline exceeding 30%. That is a catastrophic level of lost revenue.

Amidst this free fall, Wing Stop’s CEO, Michael Skipworth, remains hell-bent on remaking the company into a digital company that rejects cash and customer interactions. In an interview with Restaurant Business Online in April 2024, Skipworth called Wing Stop “a technology company that sells chicken wings.”

A 2024 article in Nation’s Restaurant News quoted Skipworth as remaining committed to completely eliminating customer interactions, stating that “The company has a goal of digitizing 100% of transactions.”

An article in Nation’s Restaurant News last month discussed how proud Mr. Skipworth is about making its kiosk ordering system slower than ordering at a counter. He boasted that customers don’t feel rushed at a kiosk, therefore they spend about 50% more time placing an order than it takes to order from a human at a counter, and that the prompts and slow ordering process can lead to incremental menu items being ordered via a kiosk.

Slowing down the ordering process for fast food seems like a rather bold strategy. But what about the customers who’d prefer to just walk up to the counter and quickly place their order with a live human? What about the people stuck waiting behind a slow person navigating the kiosk and all its upsells? What about the people with cash in their pockets but lacking a credit card? The decline in same-store sales almost certainly includes many patrons who now view the ordering process as a time-consuming hassle, and then never came back.

Even worse, the fact that Wing Stop’s CEO dismisses its core product as being an afterthought to tech is a reminder of the poisoned philosophy that has captured so many C-Suites. That mindset is:

• Products are interchangeable units. In too many CEO minds, there is no difference between a chicken wing or an airplane seat or an appliance. Those are all just generic products to which business school wizardry is applied.

• Customer service is not considered a part of the product being sold.

• Staffing to assist customers is considered an intolerable expense.

• Customers are seen as remitters of electronic payments rather than as valued patrons.

• Product quality is not a primary focus.

If I were on the Board of a company (let’s call it “Acme Widget” ) and I inquired of the CEO what the mission of the company is, the answer I would need to hear is something like “Acme delivers shareholder value by selling the best widgets available, while providing an excellent customer experience.” If the CEO replied that his vision is to pivot Acme into a technology company that just happens to sell widgets, I would seek to replace him.

It’s almost funny that concurrent with its plummeting revenue, Wing Stop is boasting that its Q3 2026 digital sales are up to a record 74%! Percentages are funny that way. By running off cash and counter-service customers, the percentage of digital customer sales necessarily had to increase, even if the actual dollar amount didn’t.

To be fair, ordering fast food via an app is quicker and easier for loyal customers than having to order at a counter every visit. There is a chain sandwich shop near my office from whom I routinely order my usual lunch in just a matter of seconds via an app. I appreciate the convenience, and it’s imperative that fast food joints have an app for their loyal customers. But I refuse to download an app and add payment info for every eatery that I occasionally visit, especially not on my first visit.

Wing Stop has chosen to run off all but its most frequent customers in an effort to become a tech company. That does not sound like a restaurant growth strategy, nor a way to attract new customers, but it does sound like a contagious business fad that can wreck a company.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

| Access Comments