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Were it not for big brother Chipotle Mexican Grill, would this summer’s opening of ShopHouse Southeast Asian Kitchen in Washington, D.C., have caused such buzz?
Not likely, restaurant analysts say. The simple fast-casual, wok-centered restaurant isn’t extraordinary by standards of decor, menu breadth or ingredient choices.
But what lies behind the scenes — ample capital for research and development and a premium management pedigree — is what has made ShopHouse a concept deemed worthy of watching.
Other than stating that ShopHouse is built upon Chipotle’s proven store and service models, procurement strategies, and high product standards, its management team has been tight lipped about plans for the concept. Stephen Anderson, restaurant analyst for Miller Tabak, said it’s clear that the company wants to get ShopHouse right before expanding it.
“We’re not expecting a lot of growth for the next year or two, so I’m thinking maybe 10 units by then,” said Anderson. “ShopHouse is still very much a work in progress, but with a lot of potential. If they can get the formula right, and I think they can because of their strong management team, I wouldn’t rule out anything.”
Nor are competitors who, like ShopHouse, see an opportunity to gain a foothold in the burgeoning Asian fast-casual market. Pei Wei Asian Diner parent P.F. Chang’s China Bistro is developing another fast-casual Asian player dubbed Pei Wei Asian Market. That concept will differentiate itself from Pei Wei Asian Diner with more rapid throughput, a lower check average, self-service and smaller, more portable portions.
“I think ShopHouse is a shot across the bow for [Pei Wei],” said Anderson, adding that the first Pei Wei Asian Market is set to open in Phoenix in April.
Eric Giandelone, director of foodservice research at Mintel, agreed.
“We definitely expect some sort of reaction from other companies,” he said. “And that might be a desire by full-service players to protect themselves. If you’re P.F. Chang’s, you don’t want people trading down to ShopHouse as the concept expands.”
Despite the fact that the Asian fast-casual segment is relatively unpopulated, Giandelone said he doesn’t envision any such concept expanding too rapidly. He said American interest in other cuisines is far greater than their craving for Asian foods.
“Our interest in Mexican food is higher than for Asian food right now, so I expect that segment’s growth to be slower,” he said. “So for all the talk about ShopHouse being the next Chipotle, I don’t know that it’s going to be as successful as quickly.”
Where Anderson believes ShopHouse has a distinct advantage over competitors is in borrowing Chipotle’s “Food With Integrity” message. That it procures hormone- and antibiotic-free meats and sustainably raised ingredients speaks directly to 20- to 30-year-old customers who are more experimental with foods like those in the Asian category.
“Sure, the operating model itself is proven, too, but the philosophy of ‘Food With Integrity’ is a message they can be the first to bring to a fast-casual Asian restaurant,” Anderson said.
Murmuring within the investment community that Chipotle is running out of growth opportunities also has Anderson and his peers wondering if ShopHouse could represent the company’s future.
“If it works, I think this could be the company’s insurance policy for growth,” Anderson said.
