Chief executive George Michel says the chain will look to expand in new ways after turnaround efforts take hold
After reworking its brand over the past two years, Boston Market is ready to grow in some new ways.
The 476-unit fast-casual chain completed last year a turnaround effort dubbed “America’s Kitchen Table” that included a menu and service revamp, as well as a shift to real plates and silverware, and other enhancements to the guest experience. As a result, this month Boston Market realized 21 consecutive months of same-store sales increases.
More changes are coming this summer, including a new protein option, the debut of a limited-time create-your-own bowl offer, and tests of a new format. Perhaps most importantly, the Golden, Colo.-based chain is also focused on reviving domestic growth in nontraditional locations.
Boston Market chief executive George Michel recently spoke with Nation’s Restaurant News about the brand’s growth and evolution.
Has the “America’s Kitchen Table” brand refresh seen good results?
We had great sales momentum from the moment we started to implement it, and that momentum has continued. We ended 2011 with an 8.4-percent comparable sales increase. And the great thing about it is we’re comping up for the first six months of this year on top of very strong comps of last year. For the first half we’re trending up almost 6.5 percent. Trying to be on the conservative side, since we had a great year last year with our holiday program, but we think we’ll finish the year up about 6 percent. And we had a better-than-expected month in June, finishing up about 8.3 percent.
To what do you attribute the strong results in June?
Frequency is up in our restaurants at this point. We’re seeing Saturday sales are much stronger than they have ever been. Traditionally Saturday was our weakest day of the week, since we are about home meal replacement. Our peak day is Thursday. But now we’re seeing momentum on Saturday, and in some cases Sunday.
We’ve also had success with promotions that are driving traffic, and people who are interested in our quarter barbecue, and that we’re the “unofficial sponsor of summer,” our summer promotion. I think people are starting to take note of the brand.
Can you break those same-store sales down in terms of traffic?
Traffic is up about 6 percent this year and last. We’re seeing increase in traffic. The rest is due to an adjustment in price we took, and also we’ve been shifting our average check. We’re selling more drinks than we did before.
Last year you were talking about launching a franchising program. Has that happened?
We decided to wait on franchising. We’re excited about re-energizing our business and getting our average restaurant volume up to a certain level. My objective is to get to $1.3 million [in sales per unit]. When I started, we were running at about $1 million and we finished last year at $1.1 million. And we figure we’ll end this year at about $1.17 million. We’re trending in that direction.
There’s some exciting work we’re undertaking. We’ve tested bowls and will introduce them as a limited-time offer in September. Bowls are very much in tune with what younger people and females expect. You create your own, with a base of mashed potatoes or mac and cheese, and top it with vegetables or carved breast of chicken oror meatloaf and add the sauce at the end from a variety of sauces.
We’re testing some other new items. We believe we need to get close to $1.3 million on average to start franchising.
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What other things are you testing?
What we’re testing is a new operating platform. We took one of our restaurants and completely changed the layout of the kitchen and the front counter and how we interact with the customer. We are very excited about it, and we’ll be testing three more restaurants.
We brought the preparation of salads and sandwiches right to the front of the line. Everything is done in front of the customer and they choose what they want on a sandwich, as opposed to sandwiches being made now at the carving station, which is behind the hot case. It has speeded up service as well.
As far as menu development, we’ve added in some test markets a Mediterranean chicken sandwich with feta, Mediterranean sauce and cucumber. That has done very well for us. We’re looking at expanding that test to all restaurants across the chain.
Also, we’re testing a new protein that we’re excited about, but we can’t reveal yet. It could end up being a game changer for us.
You have the chicken, turkey and meatloaf now, and this would be something new in addition?
Well, we always served the brisket, though we had removed it from about 90 percent of restaurants because it was a slow mover that hadn’t really had an impact on sales. We believe this new protein could replace that fourth protein that we had. We believe it has a higher consumer appeal, and it goes hand-in-hand with chicken.
You’ve talked about the potential for international growth in the past. Is that an emphasis?
We are continuing to talk to interested groups about international growth. But we don’t want to rush into that until we have a great success story behind us and feel confident can also grow in the U.S. So our first priority is to start growing again domestically, and we’re actively looking at sites. We hope to open our first new restaurant in seven years before the year ends.
We’re focused on markets in New York, New Jersey and Florida, first. We’re also looking at non-traditional locations, and Boston Market hasn’t traditionally gone there. So we’re looking at places like university campuses. We’ve positioned ourselves as “Mom’s meal replacement” on campus, because our food is closest to what mom cooks at home. We’re engaged in discussions to test in probably three or four college campuses.
We also believe freeway restaurants make sense for the brand. We’re looking at travel centers. We do have a couple already in Massachusetts and they do very well for us. So we’ll take that experience and do a more condensed menu. When we go into a campus or food court or airport, for example, we would probably focus on chicken and turkey.
You’ve been looking at smaller format?
We have design on paper a restaurant that could fit into 620 square feet. We’re in active discussions with a couple of shopping centers about going into a food court, so that wouldn’t include seating and bathrooms.
Going forward, our requirement will be to go back to the original Boston Chicken format of a few years ago, which had a smaller footprint of 1,800 to 2,400 square feet. We believe we need to go back to neighborhoods with heavy pedestrian traffic and high concentration of apartments, maybe near subway stops, and that’s why we’re looking at markets like Queens and Brooklyn [in New York], and we’re also looking at Chicago.
What size is a typical Boston Market unit now?
A freestanding location is around 3,200 to 3,600 square feet. But we’re not entertaining freestanding locations anymore. We’re going back to our roots.