P.F. Chang’s China Bistro on Monday pulled the wraps off its faster-service, lower-priced Pei Wei Asian Market, a fast-casual spin-off of its 173-unit Pei Wei Asian Diner concept.
The first Asian Market, which was converted from an Asian Diner unit in P.F. Chang’s home base of Phoenix, features salads, Pei Wei dishes and Asian sandwiches priced under $7.
“Pei Wei Asian Market offers the perfect menu for multiple dining occasions, including lunch, dinner or a mid-day snack,” said K.C. Moylan, president of the Pei Wei division.
The menu includes a “Market Fare” section with appetizer-size portions of Spice Market Noodles, sweet potato fries and P.F. Chang’s popular mincedlettuce wraps, with prices ranging from $1.95 to $4.95.
Made-to-order Asian sandwiches, such as grilled lemongrass chicken breast and banh mi-inspired Vietnamese chicken meatballs, priced from $5.45 to $6.95, have been added to the menu.
Other offerings include select entrées from Pei Wei Asian Diner’s most popular bowls and signature dishes, wok-seared with a choice of chicken, steak, shrimp or vegetables and tofu, with prices ranging from $5.95 to $6.95. Salads are $6.25.
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John Ivankoe, an analyst with J.P. Morgan, said in a report after a March dinner with Rick Federico, P.F. Chang’s chief executive, and other company officials that the Asian Market “matters, but not as broadly sweeping as some investors have suggested.”
As many as 30 of the 173 Pei Wei Asian Diner units are candidates for conversion to the Asian Market format, Ivankoe said in his report.
“There are 173 Pei Wei's in operations, of which 100 are successful, $40,000, 18-percent margin businesses in penetrated core markets, such as Arizona,” Ivankoe said.
He said those units are not likely to see format or service style changes. Pei Wei Asian Diner has units in 23 states.
However, about 60 units are in non-core markets, such as the two-unit Philadelphia market. They are “considered to be unsuccessful due to lack of market penetration and/or poor real estate,” Ivankoe said, adding that 30 of those will probably be allowed to close upon lease expiration in the next five to six years; 30 are candidates for the conversion.
The Asian Market format “is a limited and faster service/menu, lower price point concept geared to compete with true fast-casual brands. This new format is intended to have 400-500 basis point higher margins on lower sales but as the first unit is not yet open a full test is necessary,” Ivankoe said.
The décor of the first Asian Market restaurant at 742 East Glendale Road in Phoenix features a large-scale graphic of a street marketplace and a quick-service queue line. It also has an interactive menu board.
Moylan said during an investor conference in November 2011 that the Market has a more flexible footprint, smaller than the traditional Asian Diner’s 3,000 to 3,200 square feet, to fit into more dense urban areas, like the District of Columbia, Philadelphia and Los Angeles.
The first Asian Market covers 2,995 square feet, with 26 tables and 65 seats, including counter seating.
Moylan said Tuesday that customers have enjoyed the versatility of the menu. The lower prices, he added, “allow for unique pairings,” with customers matching Spice Market Noodles with lettuce wraps, for example.
The Asian Market serves all food in disposable containers, as opposed to the Diner’s washable serviceware, which makes take-out simple. The restaurant also offers complimentary wi-fi.