What is in this article?:
- Jack in the Box: Qdoba brand under further review
- Targeting key markets, customers
The company has hired a consulting group hired to help determine future brand positioning.
Targeting key markets, customers
The decision to close the locations came after the chain’s new president, Tim Casey, who was hired in March, conducted a comprehensive review of market performance.
Work on the brand, however, isn’t done. Lang said the company has hired The Boston Consulting Group to conduct a comprehensive brand review that will “help us determine how to best position and develop a strategy to implement key initiatives to further differentiate the brand and strengthen our customers’ connection to the brand.”
The review, which the company expects to complete before the end of the year, will cover elements ranging from restaurant design and menu innovations, to the loyalty and catering programs, she said. Research will also focus on who Qdoba’s core customer is and who the brand should potentially target in future, she said.
“We need to have a clear position that we are able to articulate in the marketplace to our customers,” she said. “We need to have a target consumer that’s identified, and we need to have a brand that executes against what that brand strategy is.”
Casey has also been working on development strategies for the brand, including revamping site selection tools and tweaking how the chain looks at markets and penetration, said Lang. The goal, he said, is to accelerate growth for Qdoba.
The company is expecting to open 65 to 70 new Qdoba restaurants this year, about 35 of which will be company owned.
Most of the underperforming locations that closed were in major metropolitan areas where Qdoba lacked brand awareness and was up against stiff competition, said Lang. Going forward, growth will be focused on “markets where we are already successful and we already have brand awareness versus trying to go head-to-head in those large urban metropolitan markets,” he noted.
In reports Friday, Wall Street analysts had mixed reviews of Qdoba’s positioning. “We are skeptical of Qdoba’s growth potential given our view higher sales will probably require increased staffing levels and better site locations, which may not change the return profile meaningfully,” wrote Christopher O’Cull of KeyBanc Capital Markets.
With unit economics improving, however, Conrad Lyon of B. Riley & Co. LLC suggested that the brand review could introduce other possible outcomes. “Another potential outcome is, instead of growing the chain, they could monetize it,” by spinning it off or selling it, he said.
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