Portillo’s Inc. is investing in a new point-of-sale system, digital menu boards and more robust WiFi capabilities in 2022, in what CEO Michael Osanloo said will be a “big spend” year as the company catches the brand up with technology.
Osanloo, speaking Monday at the ICR Conference that moved from an in-person event to a digital platform because of the omicron COVID-19 variant, said the Oak Brook, Ill.-based fast-casual brand, which has nearly 70 units in nine states, would be deploying technology selectively. The company raised more than $405 million when it went public in October.
“You're never going to hear us talk about being a technology company,” Osanloo said, “but we are fast followers of the very best and most proven technology enablers in the restaurant industry. We'd like to be a relatively fast follower — not bleeding edge.”
The company announced on Monday that its first Portillo’s Pick Up restaurant, featuring three drive-thru lanes as well as a pick-up area but no dining room, would open in Joliet, Ill., on Feb. 1.
Unlike traditional Portillo’s restaurants, the 3,750-square-foot Portillo’s Pick Up will emphasize guests’ use of smartphone app orders, dedicating one of the three lanes is to that pre-order “Fast Pass” pickup. The chain will also offer delivery and catering from the Joliet location.
Osanloo said Portillo’s is investing in technology where creates consumer value or operational efficiency.
“There are too many people who do technology just to say, ‘Hey, look what we rolled out,’” Osanloo said. “I'm going to do it if the guest values it and if my team members value it.”
For example, he said Portillo’s is updating its “antiquated” POS system to a 2.0 version “that will dramatically increase the efficiency of our team members.”
Other examples of tech investments, Osanloo said, include digital menu boards, which can also be used as a marketing tool, and improved WiFi capabilities that will benefit both employees and customers.
Osanloo added that hospitality will remain a priority for Portillo’s, but the brand will emphasize giving the customers the flexibility of choosing how much human interaction they want.
“We're going to remove any friction from the guest [experience],” he said.
Portillo’s high-volume restaurants — a per person check average of $9.60 and average unit volumes at $7.9 million — produce a traffic schedule that is attractive to recruit and retain employees and general managers, Osanloo added.
“I actually think that we can create even better lifestyles,” Osanloo said of the traffic demands on work schedules. In casual dining, he noted, “where you're getting 60% of your revenues from Friday-Saturday-Sunday nights, your GM's work Friday-Saturday-Sunday night.
“At Portillo's, given our balance is almost 50/50 between lunch and dinner and 50/50 from Monday through Thursday versus Friday-Sunday,” he said, “our GMs can be home much more often to see your kids and have dinner with them and put them to bed. You can't really do that in traditional full service or even in some fast casual or QSR. I actually think we have given our balance of business a unique value proposition in the restaurant industry.”
Osanloo reiterated Portillo’s goal of producing 10% unit growth, generated through cash flow.
“There's a graveyard of restaurant concepts who overcooked their growth expectations, who got way ahead of their skis,” Osanloo warned. “So we're going to be somewhat deliberate about growth. I think 10% is a good number. … I also think that 10% is a very low-risk number for us. We can execute really well. We can have experienced general managers to open every one of our restaurants at 10%.”
Portillo’s was founded in 1963 when Dick Portillo invested $1,100 into a small trailer to open the first Portillo’s hot dog stand in Villa Park, IL, which he called “The Dog House.” The menu now includes Chicago-style hot dogs, Italian beef sandwiches, grilled burgers, salads and signature chocolate cake.
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