Chuck E. Cheese’s looks to lure a new generation

The animatronic band performs on Aug. 23, 2017, at Chuck E Cheese in Chicago's Lincoln Park.

Chicago Tribune

Tom Leverton is trying to teach an old mouse new tricks.

Since July 2014, Leverton has been chief executive of Irving-based CEC Entertainment, parent of the Chuck E. Cheese’s kid-themed chain of restaurants/indoor theme parks.

Last year, a period filled with rumors that the chain might return to the public markets, Leverton was busy making the brand more appealing to kids and the parents who tote them around.

The chain, which has a location in La Crosse next to Valley View Mall, has revamped some of its nearly 600-plus locations to make room for an interactive light-up dance floor. That has meant removing the signature animatronic animal bands that have inspired TV and video game parodies and some childhood anxiety since the earliest days of the brand.

The company has updated the menu to be more chef-driven and thus less of a sacrifice for mom and dad.

And a chain that counts “to-go” as less than 1 percent of overall sales, has launched a test to take its new menu on the road, via delivery from GrubHub, Door Dash, and starting this month, UberEats.

It’s all part of a renaissance for a brand that’s been a birthday haunt for generations, following its creation by the founder of video game pioneer Atari.

“We have changed a lot at Chuck E. over the past several years,” said Leverton. “We have invested a great deal in the food. We launched a brand new menu. We have enhanced the in-store environment a great deal adding Wifi, improving the overall look and feel.

“We’ve improved things dramatically. We are working to re-energize and reinvigorate the overall brand,” he added. “We are at a place now where we are really proud of a lot of these accomplishments.”

Original idea

Born in 1977 in San Jose, Calif. as Chuck E. Cheese’s Pizza Time Theatre, the brand has undergone a metamorphosis more than once since inventor Nolan Bushnell looked to merge family-friend food and nascent video games.

After a 1980s merger, the brand became ShowBiz Pizza Place Inc. It moved to Irving in 1982, and in 1998, the company changed its name to CEC Entertainment Inc.

It is now majority-owned and controlled by investment funds affiliated with Apollo Global Management, which took the company private in early 2014, in a deal valued at about $1.3 billion. Also in 2014, the company purchased rival Peter Piper Pizza.

In an interview with The Dallas Morning News in 2006, long after he had left the company, Bushnell lamented the slow pace of modernization at his offspring.

“It’s still animals, attractions, the ball crawl. I don’t see a lot of innovation or change,” he said. “I think it’s gotten a little stagnant.”

Since then, the mouse-cot at the center of the brand’s marketing has gotten a dramatic makeover

Chuck E. was once a bowler-wearing adult rodent with buck teeth and a prodigious snout.

Today’s Chuck is a jeans-wearing, teen-ish, guitar player who is significantly thinner than his rotund predecessor.

For years, Chuck E. was the frontman for Munch’s Make Believe Band.

Many of today’s techno-savvy kids see the group as passé.

Fourteen locations (including seven newly remodeled stores) have light-up dance floors and no animatronics.

The focus now, at all U.S. locations, is on a costumed Chuck E. who comes out hourly for a “Chuck E. Live!” song and dance show.

At a Garland location, a crush of giggling hip-high huggers lined up to give Chuck E. a squeeze and take photos on a recent soggy afternoon.

“We’ve been doing that around the country, this live interaction, and what we have learned is that kids strongly prefer this live interaction than watching the animatronics,” explained Leverton.

As for the Beatles-style band break up, that’s been coming on gradually.

In the late 1990s, the band began giving way to “Studio C,” a stage show that featured animatronic Chuck E. as a solo act.

Now, seven test locations in San Antonio and Kansas City have no animatronics at all, just the live show.

Fewer than 40 percent of the chain’s locations — including four restaurants in North Texas — still have all five animatronic bandmates.

Leverton said he’s not prepared to pull the plug on all of the animatronics.

“I am prepared to say we are going to continue to work on different ways to enhance the experience for kids at the same time as wildly improving it for adults,” he said.

Still, Leverton said last year the company has a “strong hypothesis” that it will eventually shift its focus to the live Chuck E. performers instead of animatronics, according to CBS News.

Many of the tweaks — the new dance floor, animatronics boot, and open kitchens that highlight food preparation — are tests, he said.

In the San Antonio and Kansas City test stores, there are more video screens and a better sound system.

“In the seating areas, it has much more of a restaurant kind of feel which is important to mom and dad,” Leverton said.

“We’re considering remodeling additional locations in 2018 and expanding delivery to more markets if our current delivery test continues to do well,” he added. “We have some other exciting things coming down the pipeline, but it’s too early to share any details.”

One change that’s gone from test to roll out is the “PlayPass,” a reloadable plastic card that eliminates the need for the iconic Chuck E. tokens. Kids tap the pass onto a game to play.

Parents react

What remains to be seen after all of the innovation, is who, outside of the company, will bite.

In the Garland location, Mesquite resident Gerald Budzi had not noticed the building remodel or upgraded food as he tried to corral a group of effervescent kids for cake and pictures during the first birthday party for his son Elliot.

“All I want is to see my kid happy,” said Budzi, as Elliot squirmed nearby. “They have good stuff for kids to enjoy.”

But for Lake Highlands resident Nancy Ferry, visiting a Chuck E. Cheese’s recently after a decade-long absence was a revelation.

“I grew up going to Chuck E. Cheese in the ‘90s,” she said. “It is very different now.”

She was “hesitant” to visit a year ago, for her son Davis’ second birthday but ended up being “blown away.”

“It was so clean, and the food was actually pretty good,” she said. The experience prompted her family to host their son’s third birthday party at a Dallas location last month.

Annual sales for CEC Entertainment, which seemed stuck at plus or minus $810 million for years, jumped by more than 10 percent to $922.6 million in 2015, and were $923.7 million in 2016, according to Bloomberg. Of the 2016 total, Chuck E. Cheese’s consolidated revenue was $852.1 million.

Is that a strong enough surge to attract investors?

Pizza stocks that already are publicly traded have been somewhat of a mixed bag. Papa John’s saw its stock price slide by 32 percent in 2017 and is trading this week below $60 a share.

Meanwhile, Domino’s Pizza was at about $160 a share a year ago, flirted with $220 a share last summer and traded this week just above $200 a share.

A spokesman for Apollo Global Management declined to comment on whether it plans to return Chuck E. Cheese’s to the stock market.

Meanwhile, Leverton continues trying to update the aging company.

“We are a modern, viable destination for food and fun,” he said. “We want to make sure we are [presenting] an overall updated atmosphere.”

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