Panda Express, which cracked the top 10, saw its ESPU increase 5.9 percent in the Latest Year.

This year’s universe of Top 100 restaurant chains posted the lowest average growth rate in estimated sales per unit, or ESPU, in at least three years, underscoring the difficulty that operators face today in moving the needle at the store level.

Of the 100 chains in this report,  just 66 brands posted year-over-year increases in ESPU, compared with 83 brands that posted gains in last year’s Top 100 report. On average for the Top 100 chains, ESPU rose 1.1 percent in the Latest Year, down from growth of 3.7 percent in the Preceding Year.

Hard-to-build positive momentum can often come from menu moves like limited-time offers, marketing efforts that encourage repeat visits, or employee upselling of beverages or desserts. It’s a balancing act of many moving parts to keep store-level sales surging forward. 

“If I knew the exact thing behind our success, we’d bottle it,” said Dave Wallinga, vice president of guest marketing for Panda Restaurant Group Inc. “The cumulative effect of having a more informed view of our guest has led to our increase in transactions.”

Data

• Estimated Sales Per Unit
• Growth in Estimated Sales
Per Unit

Panda Express, the nearly 1,600-unit quick-service chain owned by Rosemead, Calif.-based Panda Restaurant Group, saw its ESPU, as determined by Nation’s Restaurant News research, increase 5.9 percent in the Latest Year — a top-10 result.

The Top 100 calculations for ESPU are based on a unique algorithm balancing total systemwide sales growth and the year-end change in number of units. NRN’s proprietary formula estimates partial-year sales from units opened and closed during the respective years.

At Panda Express, increased investments in consumer research have helped drive innovation that is expected to continue this year with a systemwide rollout of online ordering, a mobile application and a new branding campaign.

On its way to a 9.9-percent ESPU increase — the second-highest growth rate in this year’s Top 100 report — Boston Market tested and rolled out several new programs and products, including LTOs like barbecue ribs and a $7.99 half-chicken bundled meal. The chain also expanded evening operating hours, made headway in the lunch daypart and refreshed several locations.

These disparate initiatives in operations, menu or marketing do not work together without restaurant managers and staff getting aligned and enthused, said Boston Market chief executive George Michel.

“I knew we had a great brand and great products, but we just had to change our attitude,” Michel said. “By engaging our employees, we’ve been able to do that. Having them be part of our turnaround is what helped.”

Michel said he wants to leverage Golden, Colo.-based Boston Market’s sales momentum into new initiatives this year, such as layering on more customer service training and resuming unit growth after the chain ended its most recent fiscal year with nine net fewer locations than the year earlier.

At Arby’s — an ESPU top-20 chain, with a Latest-Year growth rate of 3.9 percent — a sales-driving success during the past year was the Smokehouse Brisket Sandwich. The  Atlanta-based chain said it was the most popular LTO in its history and a major contributor to sales momentum. But like Boston Market, Arby’s didn’t just rely on the menu item. It also worked to add a layer of renewed training to drive sales, said CEO Paul Brown.

“What’s happened in the past 12 to 18 months helping pull it all together is that we’ve crystallized around a clear long-term vision for the brand, which we discussed in October with our team members,” he said.

Perhaps an inconvenient truth for many traditional restaurant brands struggling to maintain or grow per-unit sales is the increasing relevance of convenience stores, which are working to appeal to consumers with major efforts in fresh prepared foods.

C-Store brand Casey’s General Stores led all Top 100 chains in ESPU growth, booking a 12.8-percent gain, while fellow C-Stores Circle K and Sheetz also landed in the top quartile of the Top 100 universe, with increases of 5.5 percent and 3.2 percent, respectively. The C-Store sector saw an average ESPU growth rate of 4.3 percent, the highest segment average across the report.

“The competitive nature of fresh prepared food [at c-stores] is changing the competitive landscape dramatically,” said Steven Johnson, head of Tacoma, Wash.-based Foodservice Solutions, a consultant for restaurant, convenience and grocery brands. “C-stores are ... progressive in things like distribution, packaging and freshness of product."

By the numbers

(Continued from page 1)

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN