Chicken chains hatch new products, marketing campaigns to boost sales

Nation's Restaurant News, June 24, 2002 by Paul Frumkin

Even as a weak economy pecks away at the bottom line of many restaurant companies, key players in the quick-service chicken segment have remained aloft by pursuing programs that upgrade their offerings and outlets while maintaining their value positioning.

The "Big Five" chicken chains -- KFC, Chick-fil-A, Popeyes Chicken & Biscuits, Church's Chicken and Boston Market -- have been able to crow about a promising group of menu-item rollouts that have dovetailed with programs to update the design and decor of new and existing units.

At the same time carefully conceived ad and marketing campaigns -- underscored by benchmark anniversaries at three of the chains -- also are helping to drive sales and traffic.

Nevertheless, 2001 was a challenging year, several chain executives agree. "It was a difficult year economically," says Donald Perry, vice president of communications for the Atlanta-based Chick-fil-A: "After Sept. 11 several of our malls were closed down for days. How do you recover from that?"

Nevertheless, he adds, "We rebounded toward the end of the year and wound up with a positive showing." According to Chick-fil-A's figures, its same-store sales for 2001 rose 4.9 percent over 2000 results, while systemwide sales climbed 14.35 percent, to $1.24 billion.

Jon Luther, president of Atlanta-based Popeyes, which is owned by AFC Enterprises, acknowledges that 2001 presented a number of challenges. "We did well in a difficult market," he notes. "During nine-eleven we had a blip or two in tourist cities, but we rebounded quickly."

Still, Luther contends, every year has its challenges. "But our product is perceived a little differently," he says, observing that when the economy is struggling, customers often trade down in terms of check average. "When the economy contracts, they come to us."

In spite of the benefits reaped from their value positioning, the major chicken chains aren't trusting the economy alone to drive traffic. Popeyes, which is celebrating its 30th anniversary this year, has been strengthening sales with several product rollouts that have broadened the chain's menu focus beyond its traditional bone-in products. As a part of its new Heritage menu, the company added fresh chicken strips, a new boneless item prepared from breast meat. In particular, Buffalo-flavored chicken strips have received a strong reception in the units that offer them, Luther says.

Another boneless product that has performed well for Popeyes is its Firecracker Popcorn Shrimp, he says. A Po'Boy sandwich product with shrimp, catfish and chicken strips shows promising sales growth for the chain.

In addition, Popeyes is continuing to reimage stores in its Heritage design program. The design, which Luther says has increased sales at individual units by about 8 percent, contains a number of Louisiana and New Orleans-style design elements, including a balcony over the drive-thru, Cajun-style murals, a distinctive color scheme and new signage. Already in over 200 stores, the Heritage design is expected to be implemented systemwide within the next five or six years.

Domestic systemwide sales rose at Church's for 2001 to $721 million, from $698.7 million in 2000, while comparable-store sales increased by 4 percent. The average unit volume for all Church's outlets is about $933,000, Luther says.

Product rollouts over the past year also have proved fruitful for Popeyes' sister concept, Church's Chicken, which is celebrating its 50th anniversary this year.

Church's, like Popeyes, recently launched a boneless product that's helping to broaden the concept's menu reach. Tender Crunchers, an all-white-meat, whole-muscle product, provides a level of portability that the mainstay bone-in product did not. To help market the bite-sized Crunchers, Church's designed a new piece of packaging that fits into automobile cup holders. Available in individual portions for $1.99 or family-sized portions for $4.99, Tender Crunchers are served with a choice of sauces -- barbecue, Purple Pepper or creamy jalapeno.

The introduction has been so successful, explains Church's president, Hala Moddelmog, that the chain is testing a number of similar items for future rollout. "Church's growth is going to be driven with new menu items," she says. "We think it will be the best way to expand our customer base."

Meanwhile, Church's is reimaging its restaurants. The updated look includes new sign age, new logo panels and a color scheme of yellow, cobalt blue and blue. The interior upgrade includes new wallpaper, tables and chairs. In 2001 Church's reimaged 321 company and franchised units.

Church's also launched a program to improve its drive-thru service. In addition to reinforcing the drive-thru operation with extra personnel, new design elements are in test in San Antonio. They include an updated presell board, an awning that both helps to draw customers and keeps them comfortable while in line, and new speakers and timers.

The company also is focusing on hospitality, Moddelmog says. "We're wrapping our arms around simpler ways to have team members think about hospitality. And hospitality is different in different parts of the country, so we have different ideas about how they can be more friendly and cheerful."