Chain’s emphasis on big family takeout meals are resonating with stay-at-home consumers
If there’s a silver lining to a pandemic, El Pollo Loco’s CEO said it is being rewarded by previous investments the brand made in delivery and digital ordering channels.
That has led to the chain logging record growth in its delivery and online orders, where it has been pushing large family chicken meals, during the coronavirus outbreak. The Costa Mesa, Calif.-based quick-service chain said its loyalty program is also experiencing record sign-ups.
“We’re highly encouraged by the strategies we put in place” last year, CEO Bernard Acoca told investors during a Thursday afternoon conference call. “We believe we’re well positioned to capitalize on where our customers are spending the majority of their time.”
Since the outbreak hit the U.S. and forced restaurants to shut down dine-in service, Acoca said the company has shifted its marketing to highlight value, a free delivery program through Postmates, creating more family meal options and digital ordering.
He said El Pollo Loco was the first chain to “commit” to extending its free delivery promotion over an extended period time while consumers are confined at home. Deliveries are packaged in sealed, tamper-free bags to ensure a secure and seamless experience.
Many restaurant chains have been offering free delivery promotions for a limited time during the pandemic. On Thursday, Chipotle Mexican Grill extended its free delivery offer through May 10 for orders of $10 or more made through its digital channels.
Even as restaurants are allowed to reopen dining rooms, Acoca said the brand is going to double down on improving its drive-thru operations. Before the pandemic, 45% of the chain’s sales came from the drive-thru. Now it’s well over 70%.
Making drive-thru improvements will give the chain a competitive advantage going forward, Acoca said.
System-wide same-store sales decreased 1.5% for the quarter despite a strong two months in January and February. Over the last few weeks, the chain said its strategies are working to drive sequential growth despite shelter at home orders.
“We have refocused our business to maximize sales in our drive-thru, take-out, delivery, e-commerce and mobile pickup channels,” Acoca said in a statement. “I am pleased with the trajectory of our sales trends, having seen sequential improvement in each of the last six weeks with system same store sales over the last week coming in at slightly better than negative 10%.”
Quarterly revenue of $105.2 million compared to $109 million for the same quarter last year. Net income of $3.6 million, or 10 cents per share, compared to net income of $0.9 million, or 2 cents per share, in the first quarter of 2019.
The company said 192 out of 195 company-operated restaurants are in operation, while 279 of 283 franchised restaurants are open for takeout, delivery and drive-thru services.
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