Industry News | March 1, 2013 | QSR Exclusive Brief

Popeyes Stays on a Roll in 2012

For Popeyes Louisiana Chicken, 2012 seemed to be a year of fours: four straight years of same-stores sales increases; four years of traffic increases; and four years of outperforming both quick-serve chicken concepts and the quick-service industry as a whole in terms of domestic same-store sales.

But last year meant more to the brand than just a four-year positive streak; it also proved to be a year of growth by almost every other measure.

Total system-wide sales increased by 13.5 percent in fiscal 2012, while global same-store sales went up 6.9 percent during the year, compared to a 3.1 percent increase in 2011. In the fourth quarter alone, global same-store sales were up 6.2 percent, growing over the 5.8 percent increase in 2011.

The brand opened a net total of 66 restaurants in 2012, and plans to open 85–115 net new units in 2013, a growth rate of 4–5.5 percent.

And while international same-stores sales slowed by just a hair—increasing by 2.3 percent in 2012, compared to 3.3 percent in 2011—Popeyes president Ralph Bower says he isn’t concerned about the brand’s health in the global market.

“We’ve been on a pretty long and extended run” in the international market, he says, pointing to the fact that Popeyes has seen six consecutive years of positive same-store sales globally.

He says the brand’s Cajun cuisine—which combines flavors from seven different countries—helps Popeyes appeal to foreign customers. “Our rice-based sides and beans and flavorful profile really lends itself to international expansion, and we’re putting a lot of things in place to get ready for that,” he adds.

While it’s focused on growing in the international space, the brand is more concerned with strengthening its presence in existing markets, Bower says. Better yet, the brand’s biggest priority is right here at home, he adds.

“At Popeyes, our domestic growth story is equally as compelling. We have the opportunity to at least double in size, if not more than that, domestically,” Bower says, adding that the chain is underpenetrated in almost every U.S. market aside from New Orleans.

Going back to its success in 2012, Bower says it largely came down to a combination of three factors: marketing, messaging, and menu.

For the first time, the brand switched from local to national advertising, which Bower says “has really made a huge difference for us.”

Popeyes has also created messaging that delivers a stronger platform “to talk about our distinctive Louisiana food and our culinary heritage,” Bower says, “and that seems to really be resonating with our guests.”

Finally, when it comes to menu innovation, he says the brand’s dual focus has helped it create some innovative and traffic-driving options.

“One of the things that makes Popeyes Louisiana Kitchen different from any other chicken [quick serve] is that we are the only one with competencies around not only chicken, but seafood, as well,” Bower says. He adds that some of the brand’s most popular promotions in 2012 were seafood-focused, including the Zatarain’s and Butterfly Shrimp promotions, as well as the Crawfish Festival.

In 2013, the brand plans to continue delivering in each menu area, with innovations in both boneless and seafood items.

Bower also points to the overhaul of the brand’s operations over the past five years as a contributing factor in improved guest satisfaction and higher repeat business.

In the brand’s recently created Guest Experience Monitor surveys, approximately 70 percent of diners are giving Popeyes full marks on every aspect of the customer experience.

Going into 2013, Bowers says it’s essential to continue focusing on the guest, and that starts with the team it has in place at each unit. “At the end of the day, the brands that win are going to be the brands that have the best-motivated and the best-trained teams,” he says.

In addition, he says a focus on franchisee profitability has played a large role in the brand’s success in 2012 and will continue to do so in the future.

Last year, average restaurant operating profit increased by almost $30,000 over 2011, a year-over-year growth of almost 19 percent.

“One of the things we’re probably most proud of is we have a fanatical focus around franchisee profitability, and the fact that our franchisee profitability has improved for four straight years despite the … commodity-cost headwinds that we’ve faced,” Bower says. “We’ve purposely chosen our franchisees as our No. 1 customer, and that’s a model that’s worked well for us.”

By Mary Avant