Officials for Buffets Inc. said the Greer, S.C.-based operator of five buffet brands ended its fiscal 2013 with its best annual same-store sales increase in eight years, including positive comparable sales in the fourth quarter.
While privately owned Buffets would not divulge specifics, chief financial officer Keith Kravcik noted that the same-store sales gain in Buffets’ fourth quarter marked the first time in recent memory that the company reported increases in comparable sales in back-to-back quarters. “This is the best position Buffets has ever been in,” he said.
With the stabilization efforts of the past year leading to two quarters of same-store sales growth, Buffets is “ahead of schedule” in its turnaround plan, Kravcik said.
Under new chief executive Anthony Wedo, who joined the company in December 2012, Buffets has begun a “Plan to Win” that involves overhauling the marketing, menus, facilities and operations of the system, which includes the Old Country Buffet, HomeTown Buffet, Ryan’s, Fire Mountain, Country Buffet and Tahoe Joe’s brands.
The next part of the company’s agenda involves rolling out its “Main Street” rebranding program to its restaurants in Minnesota after a successful test in the Denver market of its new products, updated restaurant designs and improved operations procedures. “We can’t wait to get Minneapolis done and invite guests in to see it,” Kravcik said.
He added that Buffets officials are most pleased with the fact that the company can self-fund the turnaround acceleration with cash from operations, not its exit financing from when it emerged from Chapter 11 bankruptcy.
“We don’t have to use any debt; it’s all cash flow,” Kravcik explained. “We’ll be cautious with our shareholders’ money, and as we test Main Street, we’ll measure it. Minneapolis will give us a good read on when we can roll it out to the rest of the system.”
Buffets will also have a chance to reinvest in its back-office infrastructure and roll out a common point-of-sale system to all its restaurants by the end of the year, he noted.
Chief marketing officer Jason Abelkop described Buffets’ process as addressing foundational, competitive and transformational challenges.
The foundational issues were met with the company’s Four Star Operating platform and menu initiatives called the Great Steak Pledge and the Real Favorites lineup of items. The company sought to address competitive issues with a “laser focus” on marketing to young families, which led to a successful weekly Family Night promotion, he added.
“What we’re doing with Main Street in Denver is really beginning to touch on what we think is the transformational piece,” Abelkop said. “Two markets don’t make a system, obviously, but we’re way ahead of where we thought we’d be at this point.”
Kravcik said Buffets would remain focused in the near term on further solidifying sales and profitability at its existing restaurants by applying best practices learned from the Denver revamp. No major unit-growth plans have been formulated as yet.
“Our 334 base buffet restaurants are the biggest bang for our buck,” he said. “We’ll look at opportunities if they come up, but we have to prioritize where we spend our money, so we won’t grow by 50 stores or anything. … I’d say the advantage of having done Denver and being cautiously optimistic in Minneapolis is that we’re starting at a different point there than we did in Denver. It came out in phases in Denver, and we’ll have it more out of the box in Minneapolis.”
Buffets operates 334 buffet restaurants and 10 casual-dining restaurants in 35 states. At the time of its bankruptcy filing, the company had 494 restaurants.