Industry News | November 8, 2012 | QSR Exclusive Brief

No End in Sight for Popeyes' Sales Increases

The numbers are in, and they’re looking good for Popeyes. In the third quarter, the chicken chain reported a net income of $6.9 million—up over $5.8 million in 2011—10 quarters of consecutive positive sales results, and a global same-store sales increase of 6.3 percent.

President Ralph Bower says it’s not just Q3, but all of 2012 that’s been great for the brand. Starting off the year with hopes of seeing 2–3 percent sales increases, Bower says the brand has exceeded expectations each quarter.

“Every quarter has been better than the last,” he says.

Though he says operational improvements have allowed the brand to thrive, Bower attributes much of the brand’s success in this and recent quarters to the company’s product innovations.

In the third quarter alone, Popeyes re-introduced three popular items to the menu: Dip’n Chick’n, Wicked Chicken, and Handcrafted Tenders.

“What we have found is we’ve been able to launch compelling limited-time offers that have brought customers in,” Bower says. “In this business, it’s about having a consistent plan and sticking to it. Every quarter, we try to have some new product innovation.”

The product innovation team, which Bower says is the “best in the business,” has helped create the brand’s identity as one that’s known for its menu developments.

It not only makes a point of pushing its famous everyday chicken products, but it also shines a spotlight on its seafood offerings and bone-in chicken, which Bower says are differentiating factors that help the brand stand out among its competitors.

Though the chain expects commodity costs to increase by about 2 percent in 2013, Bower says Popeyes won’t raise prices for cost-conscious consumers.

“We think that we can overcome the entirety of that increase through higher top-line sales,” he says, adding that the brand wants to ensure consumers always feel its prices are “fair.”

“We’ve made sure that we always have compelling but profitable price points for the consumer,” he says.

And speaking of profit, Bower says the profit franchisees have seen this year is another way the brand stands out in the quick-serve crowd. Franchisee operating profit is up 1.7 percent year to date, and operators are experiencing an average unit volume increase of $10,000 more this quarter than in the same quarter in 2011.

Aside from a focus on menu innovations and franchisee profitability, Bower says the “No. 1 change as we finish 2012 … is going to be what we call building a culture of servant leaders.”

The initiative will involve each member of the Popeyes team—from the executive team members to the individual operators and down to the associates in the store—and aims to build a unique employee value proposition and outstanding guest experience. It will be rolling the initiative out to the entire system next year.

“Popeyes is a brand that, as far as product attributes go, we’re probably the envy of the [quick-service restaurant] industry,” Bower says. “We’re excited to get the guest experience as fantastic as the food is.”

By Mary Avant