Buffets buoy KFC; chain revives '80s ad slogan

Nation's Restaurant News, Jan 11, 1993 by Theresa Howard

LOUISVILLE, Ky. -- KFC is resurrecting a theme line from the 1980s that proclaims "we do chicken right" at a time when the company is encouraged by positive results from the chain's all-you-can-eat buffets that offer chicken and more.

KFC and franchisees said the self-serve buffet operation is yielding about a 15-percent-to-17-percent increase in sales at franchised outlets.

Despite the approximate $15,000 to $20,000 initial investment per store and 2 percent rise in food and labor costs to operate buffets, franchisees said the gain in customer counts and rise in sales is helping the buffet program to yield healthy returns, franchisees said.

KFC public affairs director Gary Gerdemann would not disclose figures for company-owned stores.

The buffet service, which sells for $3.99 at lunch and $4.99 at dinner, offers 30 products, including Original Recipe and Extra Tasty Crispy chicken, and such items as fruit salad, chicken fried steak, rice, macaroni and cheese and gizzards. The program is available in 450 stores throughout 25 states, Gerdemann said.

And buffet sales are helping to boost overall guest checks about 75 cents to $1 over the previous average of $4.50 per person, franchisees noted.

Meanwhile, the chain is modifying its overall advertising with the second coming of "we do chicken right," which was first introduced in 1981. The company reintroduced the motto Jan. 1 in the chain's commercials. Though Russ Beeler continues to play the role of spokesman, "We are KFC. We do chicken right" replaces "in Lake Edna or your neck of the woods" in the Beeler spots.

"Five years after we last used "We do chicken right" consumers still quote it back to us in our market research," Gerdemann said of the decision to bring the motto back to life. "That and our efforts to reinvent KFC led us back to the basics as it were." Among KFC's efforts is to become a more regional operation by tailoring menu items to different ethnicities and markets.

Nonetheless, KFC said the "chicken right" message, which focuses on the chain's core product, is by no means a contradiction to the buffet program, which emphasizes variety. "Col. Sanders has always been known for his great sides. So having a wide array of sides is by no means discordant of serving great chicken," Gerdemann said.

While it may take some time to see if the new theme line works, franchisees are reporting that the buffet already is helping to boost sales. "Everything we have heard is coming true," said Terry Moffet, who is president of P.I.G.O.U.T, a 16-unit KFC franchisee in Cody, Wyo. "We are very pleased with the results in top line and bottom line." Moffet said average weekly sales in stores with buffets are "in that ball park" of a 15-percent-to-17-percent increase.

Moffet said customer counts are up as well, especially during lunch hours, and those customers are trading up, spending about $1 more per person. That, he said, is helping to offset jumps in labor and food costs. Despite the slight increase in actual food and labor costs, though, Moffet said the rise in costs is relatively flat as a percentage of sales. Food costs hover at 38 percent and labor at 17 percent as a percentage of buffet sales. Traditional sales generate 33 percent food costs and 24 percent labor costs, Moffet said.

He also said his costs to add the buffet are running about $13,000 per store. They are lower than at other stores because of the buffet's design. While some operators are adding a new design that allows the buffet to be serviced from the kitchen, Moffet installed the traditional lower-priced buffet.

In Little Rock, Ark., Jerry Haynie is seeing buffet sales account for about 30 percent of overall sales in rural markets and about 20 percent in metropolitan markets. "Buffet is answering the value issue because customers perceive it to be an extremely good deal," Haynie said. Another franchisee, Al Luihn, chief executive of Luihn Food Systems in Durham, N.C., is so excited about buffet that he plans to upgrade at least six stores with new dining areas and seating. Luihn has buffet in six of his 19 stores and plans to have it in all by spring.

"The concept is a perfect fit for KFC because we offer signature items on the buffet that other chains can not offer," Luihn said.

Luihn also reported weekly sales gains of about 15 percent to 17 percent, with lunch sales generating a greater portion of the sales increases."

Luihn said part of the success of buffet is the new in-line design that cuts labor because the food bar is serviced from the kitchen. "Thus far, we have put in the in-line buffets because you can keep the food bar fresher," he explained.

Another Arkansas franchisee is optimistic about the program. "We have got the program in 14 of our 15 restaurants," said Chris Fowler, president of Fowler Foods Inc. "We are seeing sales gains ranging from 15 to 40 percent and buffet sales at 23 to 28 percent as a total mix of sales."