Zoës Kitchen recently opened its first restaurant in Missouri, but Kevin Miles, CEO of parent Zoe’s Kitchen Inc., said the company plans to deepen penetration in existing markets.
The Plano, Texas-based Mediterranean fast-casual chain, which has 144 units, opened its first restaurant in Kansas City, Mo., in March, but Miles said the company is unlikely to colonize new markets this year.
“In 2014, our growth was 100 percent in existing markets,” Miles told Nation’s Restaurant News last week. “And in 2015, it’s shaping up to be very close to that. We opened in Kansas City, and we have more coming. We hope to have four to six locations in an 18-month time frame.”
The company opened 12 new restaurants in the first quarter ended April 20, and Miles said he expects to the company to open between 31 and 33 new restaurants this fiscal year.
“Our goal in 2016 would be to continue penetrating the 16 states we are in, as well as probably seed another new market or two,” he said.
Miles anticipated that those openings would be announced in the next three to six months, adding that the company generally looks for new unit openings to be located 25 percent in a new market and 75 percent in existing territories. New restaurants are generally 2,800 square feet, with 110 seats, and include a patio, he said.
The company seeks a variety of locations, ranging from mall end-cap sites to conversions, such as a recent Texas conversion of a closed Carl’s Jr. restaurant, Miles said.
In the past two months, Zoës Kitchen has also hired Antonio Iocchi as vice president of culinary strategy to lead menu initiatives, Miles said.
“Antonio brings robust experience gained through more than 25 years in the casual- and fine-dining restaurant business,” he said. “He brings fundamentals and techniques from Spain, France and his native Italy to Zoës, allowing us to continue to introduce new flavors from the 21 countries of the Mediterranean.”
Miles said Iocchi’s background, which includes 18 years with Romano’s Macaroni Grill, “fits very well” with the chain.
Zoës Kitchen changes its menu once a year, typically in February, Miles said. This year, the company introduced new hummus flavors, allowing it to offer a Hummus Trio. Miles said the hummus-and-pita offerings have contributed to Zoës average check growth. In addition, the new menu featured a Mediterranean Chicken dinner, which Miles said “resonated positively with our customers, and early on it appears we have benefitted from a mix shift from less expensive entrée items.”
The Mediterranean Chicken dinner “will be another solid contributor to growing our dinner daypart,” Miles said, which has been a company goal. Excluding catering, which makes up about 16 percent of Zoe’s revenue stream, the daypart split is generally 60 percent lunch to 40 percent dinner. In 2009, that divide was about 75 percent lunch to 25 percent dinner, Miles said.
For the first quarter ended April 20, Zoe’s profit was $692,000, or four cents per share, compared with a loss of $10 million, or 76 cents per share, the previous year. Revenue increased 36.2 percent, to $63 million, from $46.3 million the previous year.
Same-store sales rose 7.7 percent.
“The concept continues to resonate with the consumer,” Miles said. “We’re trying to bring Mediterranean mainstream.”
Contact Ron Ruggless at [email protected].
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