Captain D’s upgrades bolster sales

Captain D’s Seafood Kitchen has continued to build on positive same-store sales, a result of systemwide upgrades.

Those changes include new and upgraded menu items, redesigned restaurants and a revamp of the quick-service chain’s marketing strategy, said Captain D’s chief executive Phil Greifeld.

During fiscal 2012, same-stores sales increased 9.2 percent at company-owned restaurants and 7.5 percent at franchised locations — both records for the brand. In 2011, the Nashville, Tenn.-based company realized its first same-store sales increase in eight years.

“We started building the foundation in 2011,” said Greifeld, who joined the company in September 2010.  “It takes a while to make some corrective action…first and foremost, we’ve set out a strategic direction with an everyday mindset of how we can heighten the guest experience.”

Restaurant renovations were part of the change. Redesigned units resemble coastal seaside destinations, complete with a fresh color palate, more communal seating and drum-style lighting. “It has resonated very well with our existing guests,” Greifeld said, adding that the design was first tested in 2011.

The company plans to redesign all 520 Captain D’s locations in the coming years. The rollout is under way right now, Greifeld said, but the company has not yet determined a specific time frame for the changes. Currently, 22 company-owned restaurants have been completely redesigned.

The redesigns typically cost $80,000 to $100,000 and show return on investment within about two to three years, Greifeld said. Redesigned units have in some cases seen double-digit sales growth, and franchisees have started to show interest in redesigning as a result, he said.

In addition to the redesigns, Captain D’s has revamped its food, striving to serve a more consistent fish product. The brand had to position itself as a seafood expert and to refocus on craveability, Greifeld said.

About a year and a half ago, Captain D’s began selling a Southern-style whitefish served with two sides for $4.99.  And two weeks ago, the chain began selling hand-breaded fish tenders with dipping sauce for Lent. “They’re delicious, they’re fun, they’re hand held,” he said. “They work in our drive-thru, they work in dine-in. They’re kid friendly and adult friendly.”

Improved items have resonated with guests, according to Greifeld.

The chain has promoted its upgrades with a new marketing campaign. On Valentine’s Day 2012, Captain D’s launched a new advertising campaign with the tagline “When you love seafood this much, it’s gotta be D’s.”

“The brand has historically always marketed on TV, but when I look back over the last couple of years, we’re just doing a better job with it,” Greifeld said.

“This really marks the start of a new direction for our brand,” said Jonathan Muhtar, Captain D’s chief marketing officer, at the time. “We’ll continue to focus on those aspects of our brand promise that make us a differentiated and appealing concept to our guests.”

The marketing campaign aimed to reinvigorate lapsed users — people who no longer ate at Captain D’s, but may still be interested in the brand, Greifeld said. And the increase in same-store sales in 2012 shows that the mix of updated marketing, refreshed units and menu upgrades is working.

“The brand always had a unique and differentiated market position. The brand was always comprised of restaurants that from a financial standpoint were kicking off very good cash flow,” he said. “All the while we’ve felt that we had a strong brand that just needed some tender loving care.”

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