In the fall of 2017, Dave & Buster’s started to really vocalize the effects of a changing industry. Not just restaurants in particular, but an “eatertainment” space growing more crowded by the day. In that quarter, Main Event Entertainment, a Dallas-based concept, opened five stores in Dave & Buster’s corridor. Two Topgolf units debuted as well. And all of this as Dave & Buster’s continued an aggressive growth strategy that, executives admitted, created some negative headwinds related to cannibalization.

Then-CFO Brian Jenkins, who is now the chain’s top executive, said at the time, “We are watching the competitors closely in terms of when we think they’re going to open and trying to measure the magnitude of that opening, but it’s not always totally clear.”

Put simply, Dave & Buster’s wasn’t the only game in town anymore.

While not entirely tied to this reality, that quarter—Q2 of fiscal 2017—marked the last positive same-store sales performance for some time at Dave & Buster’s. The brand reeled off five straight negative periods, including mid-single digit drops of 5.9 and 4.9 percent, respectively, in Q4 2017 and Q1 2018.

READ MORE: How Dave & Buster’s inspires employees in the millennial age.

That all changed Tuesday as the company reported a 2.9 percent lift in same-store sales to close out the fiscal year.

Jenkins called it a “year of meaningful progress.” What’s changed? To start, Dave & Buster’s took several key steps toward carving out its own niche again. The most recognizable of these changes is the virtual reality platform that will add its fourth proprietary title—based on the upcoming Men in Black movie—in Q2 of 2019. “Our ability to efficiently execute such a large-scale national rollout is unmatched in the industry,” Jenkins said. That’s where Dave & Buster’s and its 125 units can still overwhelm the rising pack. Many of its competitors still identify as emerging, like Punch Bowl Social, just named No. 10 on data firm Fishbowl’s annual list of up-and-coming brands, Pinstripes, Tom’s Urban, and others.

A good example of this is what’s happening with Dave & Buster’s food program. In February, the chain cut back 15 percent of its items. That on top of a 20 percent reduction implemented a year ago. There are now about 40 total options and more than 20 handcrafted cocktails. It’s a significant change, and one Jenkins said allowed the brand to simplify operations, improve execution, and shine a serious light on quality.

Beyond just sourcing better ingredients, Dave & Buster’s has an entirely new food mantra, “Crafting Craveability.” And it dove head first into the idea. Over the past year, Dave & Buster’s has replaced or recrafted roughly 75 percent of its menu. It’s a staggering figure for a 12-month run.

When Dave & Buster’s launched a new menu in February it put the emphasis on premium. Choice steaks were added following a chicken and burger upgrade from last year. The brand then rebranded and upgraded some classics. The Super Stack Burger replaced Dave’s Double Cheeseburger and Tuscan Chicken Alfredo took over for Parmesan Chicken Alfredo.

Additionally, Dave & Buster’s brought some healthier offerings into the mix, like the Simply Grilled Chicken with Zoodles. Pressed juices and purees were tossed in systemwide to improve mixed drinks, too.

Jenkins said the changes are going to take some time to land from an awareness standpoint. Mainly because food and beverage are not Dave & Buster’s primary driver of guest visitations, and that likely won’t change. Still, the chain is working on its messaging and quality callouts on menus. And, over time, plans to feature food more prominently in marketing campaigns, Jenkins said.

The brand even recently launched a fast-casual tacos concept in Dallas that focuses on street foods. Jenkins said Tuesday the pilot was designed to really gauge the potential demand for a more convenient and accessible food option at Dave & Buster’s. So far, it’s been well received by those who have experienced it, he said. However, initial demand has not been as strong as anticipated. Dave & Buster’s is working to improve in-store awareness and utilization, he added.

Over the past year, Dave & Buster’s has replaced or recrafted roughly 75 percent of its menu.

“We continue to have access to the best of what the industry has to offer, often on a limited-time exclusive basis. This access is due to our size, our scale, and our ability to put out games on national TV.” — Brian Jenkins, Dave & Buster’s CEO.

Standing out, in a few ways

Let’s rewind again. In April 2018, former CEO Steve King, who retired last summer, said, “In retrospect, our new amusement offerings in the quarter produced less compelling than in the comparable period last year.” Dave & Buster’s typically robust amusement business hit a wall. Walk-in sales plummeted 6.4 percent as amusement business dropped 4.2 percent. King said a subset of younger guests, those casual gamers who are more interested in Dave & Buster’s other experiences, didn’t connect with the brand in the way the chain hoped.

The answer: Give guests something they just can’t get elsewhere. Also, it needs to be as alluring as it is proprietary. “In amusements, we are providing our guests with the most compelling games in the industry,” Jenkins said. “We continue to have access to the best of what the industry has to offer, often on a limited-time exclusive basis. This access is due to our size, our scale, and our ability to put out games on national TV.”

This goes back to the scale conversation and where Dave & Buster’s can win. It’s akin to some fast-food giants beating fast casuals on price and promotions. Nobody in the eatertainment space can secure these proprietary titles like Dave & Buster’s. And nobody has the ad spend to promote them nationally on this level.

Dave & Buster’s launched a Marvel: Contest of Champions game in mid-February ahead of the Captain Marvel movie premiere. It included collectible cards designed to inspire repeat play. Just last week, Dave & Buster’s unveiled Star Trek: Dark Remnant, it’s third VR title.

“We really want games that people can’t have at home that are larger-than-life, and that has pushed us toward bigger, better, and more marquee titles,” Jenkins said.

VR has been so effective for Dave & Buster’s that it saw a chance to take a price increase in about half of the locations. It originally piloted at $5. The brand didn’t say exactly how much price it took on VR, only that the demand allowed it and it was “relatively small.”

“It’s one of the new avenues that we have as a brand to introduce proprietary content that others don’t,” Jenkins said. “The industry produces what they produce, but we can actually control our destiny a little more with this particular platform.”

On an interesting note, Jenkins said Dave & Buster’s is evolving its media mix to favor digital with more emphasis on programmatic, social media, and search engine marketing and optimization. He said the brand was funding this digital media investment primarily by shifting dollars away from national cable TV, and also through some incremental spending. TV will remain the majority, however, and isn’t going away.

This past quarter, Dave & Buster’s amusement and other sales category, which represents 55.5 percent of the brand’s total revenues, grew by 10.7 percent, or a 100-basis points increase in mix from the prior-year period. Food and beverage rose 6.5 percent.

On the comps side, amusements lifted 4.4 percent and F&B rose 1.1 percent, comprised of 1.3 percent on the food side and 0.9 percent in the bar category, respectively.

The gap between the two closed a bit thanks to an All You Can Eat Wings promotion.

Dave & Buster’s says its current game lineup is more compelling than ever.

Reduce the friction

This has been the biggest point of emphasis for Dave & Buster’s in regards to improving guest experience. And technology has been the gateway. The brand kicked off 2019 with a national rollout of RFID Tap and Play power cards, which operate similar to a hotel room key. Jenkins said it results in easier game activations and faster service. They’re also priced higher than the older cards, although they offer more value through additional gameplay chips.

Dave & Buster’s recently completed a systemwide rollout of a new labor management system that aims to improve scheduling efficiency and, in turn, enhance guest service. The brand also plans to introduce a fresh mobile app in the back half of 2019 designed to offer greater functionally and, ultimately, drive better guest engagement.

Jenkins said research in 2017 suggested Dave & Buster’s could do better with service scores. So it’s been working on “being more friendly, more available, and delivering a more memorable experience when guests come into our stores.”

Growth goals

Dave & Buster’s remains on track for its long-term target of 231–251 stores, or about twice its current size. The brand opened three units in the fourth quarter, including new markets in Birmingham, Alabama, and Corpus Christi, Texas. The latter unit was also Dave & Buster’s second 17,000-square-foot location.

For the full year, it opened 15 new stores, representing 14 percent unit growth. Dave & Buster’s expects to debut 15–16 restaurants in 2019, skewing mostly toward large-format openings and new markets. Five have already opened in Q1—Louisville, Kentucky; North Hill, Pennsylvania; Thousand Oaks, California; Daytona Beach, Florida; and Fairfax, Virginia.

Dave & Buster’s has the scale and resources to offer more exclusive titles than anybody else in the eatertainment space.