Same-store sales at Arby's rose 7.6 percent in the second quarter, as the chain’s marketing and a strong series of new products continued the chain’s momentum well into a fifth year.
The company is expected to report the sales on Monday, but gave Nation’s Restaurant News a preview of the numbers. Same-store sales have increased 8.5 percent year to date, and on a two-year basis are up 13.8 percent. Same-store sales have now increased 19 consecutive quarters, according to the company.
“When you have a good top line it makes everything better,” CEO Paul Brown said in an interview. “We’ve had strong sales for the past couple of years. We attribute that to efforts we started last year to reposition the brand around fast-crafted, deli-inspired delicious.”
The chain’s marketing — “We Have The Meats” — was started a year ago and, Brown said, has helped the chain break through the noise in the quick-service restaurant sector. The company said that it outpaced the quick-service restaurant industry by 5.3 percentage points in the second quarter.
“That’s continued to break through the clutter and really do a great job of telling the story we have,” he said. “We have multiple proteins, multiple meats and the types of sandwiches you can’t find in a quick-serve format anywhere else.”
Brown said these messages are convincing customers to give the 3,300-unit Arby’s a try after some time away. Five years ago, just before the Atlanta-based company was sold to Roark Capital, the chain’s sales were struggling and unit volumes were low. System sales fell 15 percent between 2008 and 2010, for instance.
“The marketing has caught people’s attention and convinced people who haven’t thought about Arby’s in a while to give it another try,” Brown said. “There is no trial going on that we haven’t had in a while.”
In the second quarter, the chain generated sales with gyros made from turkey and roast beef, as well as a pecan chicken salad and smokehouse turkey, which went along with a promotion for the chain’s successful smokehouse brisket sandwich.
But the company has also worked to use social media to its advantage, using different marketing strategies to generate positive buzz.
Those strategies include a recent, playful back-and-forth with Jon Stewart, the comedian who is leaving as host of The Daily Show, and who has routinely poked fun at Arby’s over the years.
Arby’s has developed a secret menu item called the “Daily Deli,” which is seven ounces of corned beef on rye. The reason: Stewart’s favorite sandwich is apparently corned beef on rye.
That back-and-forth demonstrates that Arby’s is willing to laugh at itself. In February, after Stewart announced his retirement, Arby’s said he was welcome to apply for a job there. Stewart declined on his show, noting, “We shall always be enemies!”
“There’s a personality we’re trying to create for the brand,” Brown said. “Be authentic. Be real. Be true to ourselves, and not be afraid to poke fun at ourselves and not be defensive. We’re creating a fun, authentic personality for the brand.”
The company also recently highlighted its meat-heavy menu by creating a “vegetarian hotline,” 1-855-MEATHLP, for vegetarians who might have been tempted by the chain’s brown sugar bacon sandwiches.
There were 17,000 voice messages left on the hotline.
“I think it’s very important for a brand to have a personality,” Brown said. “You have to be careful in making sure it doesn’t come across as a contrived personality. You have to let it evolve a bit, versus trying to force a personality on your customer base.”
The chain’s sales strength has given the company confidence to build new units and remodel existing locations, both of which it hopes will help lift systemwide sales to its goal of $4 billion by 2018. Those systemwide sales were $3.26 billion in 2014.
The company is on pace to open 60 units by the end of the year — twice as many as last year and four times as many as the chain opened the year before that.
The company has also remodeled 53 locations with plans to remodel a total of 160 locations this year. Those remodels on average lift sales by 15 percent per unit, Brown said.
“We think that, as we continue to improve the buildings, and the quality of the buildings matches the quality of the food more closely, that pulls together a much more compelling value proposition for customers over time,” Brown said.
This article has been revised to reflect the following correction:
Correction: July 24, 2015 An earlier version of this article had the incorrect phone number for Arby's "vegetarian hotline."
Contact Jonathan Maze at [email protected]
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