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The Cheesecake Factory Is Not Just about Desserts

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Positioning

The Cheesecake Factory (CAKE) has positioned itself as an upscale casual dining concept that focuses on providing a distinctive, high-quality dining experience, thus catering to a diverse customer base.

The Cheesecake Factory is Not Just Desserts

The company’s menu features 200 items apart from its supplemental menu, which features 50 innovative items that are under 590 calories. The company’s core menu includes pizza, seafood, steaks, chicken, burgers, small plates, pastas, salads, sandwiches, omelets, desserts, and approximately 50 varieties of cheesecake and other baked desserts.

Core menu item sales formed 62% of CAKE’s total sales in 2015. The Cheesecake Factory restaurants are open for lunch and dinner all seven days of the week, and brunch is available on Sundays. The company also provides take-out services, which form 9% of its total revenue.

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Bakery operations

The Cheesecake Factory has two production facilities: one in Calabasas Hills, California, and one in Rocky Mount, North Carolina. At its production facilities, the company produces ~70 varieties of cheesecakes and other baked desserts for its restaurants and external customers. Dessert sales formed 16% of its total sales in 2015.

Alcoholic beverages

Each Cheesecake Factory restaurant features a full-service bar. Alcoholic beverage sales formed 13% of the company’s total sales in 2015. In the same period, alcoholic beverage sales formed 11% of the total sales of Texas Roadhouse (TXRH) and Bloomin’ Brands’ (BLMN) Outback Steakhouse.

Suppliers

With the intention of maximizing purchasing efficiency and providing fresh ingredients, CAKE’s restaurant managers are required to order either from local, regional, or national suppliers based only upon the specifications established by CAKE’s corporate office and on the terms negotiated by CAKE’s central purchasing staff.

The company’s management claims that due to a high turnover of perishable produce, including poultry, meat, fish, and dairy, it strives to maintain low inventory levels. Management further stated that independent foodservice distributors supply its restaurants with most of these items multiple times per week.

Together with Domino’s Pizza (DPZ), CAKE forms 0.56% of the holdings of the SPDR S&P Mid-Cap 400 ETF (MDY).

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