Industry News | September 17, 2003

Jack in the Box Plans to Reinvent Itself

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After issuing guidance well below Wall Street expectations for its fiscal 2004 Q1 and full year, Jack in the Box has announced a three-to-five year program to "re-invent the Jack in the Box restaurant brand through innovative, quantum-leap initiatives to move its menu, service and restaurant facilities to a new level of quality in the industry," according to a statement.

"During the last several years, our restaurant segment has felt the impact of a soft economy and price wars," Robert J. Nugent, chairman and CEO, said in the statement. "It has also been greatly affected by a shift in consumer expectations toward higher-quality food, improved service and a more enjoyable atmosphere. To achieve long-term earnings growth, we must address these trends and set a new industry standard of restaurant experience, which will include enhancements to drive-thru service, a convenience available only in the quick-serve category.

"Re-inventing the Jack in the Box brand is now the centerpiece of our current strategic plan to become a national restaurant company," he added. "During fiscal 2004 and 2005, we will continue to open new Jack in the Box restaurants and add franchise conversions, but at a slower pace as we develop and test brand re-invention. We will not actively seek new acquisitions as we continue to rapidly grow our new fast-casual subsidiary, Qdoba Mexican Grill, and expand our convenience-store concept, Quick Stuff."

The company announced that it has already completed or initiated the following key elements of the Jack in the Box brand re-invention effort:

  • Construction of a new Innovation Center that will support product marketing, research and development, and quality assurance.
  • Working in collaboration with culinary experts, including both the Center for Culinary Development, and Perspectives Inc., the company has developed a pipeline of new premium products for fiscal 2004 and beyond.
  • Expansion of its customer base to include more women and consumers older than the current 18-34 year-old male target.
  • Successful introduction of Jack's Ultimate Salads, a premium line of entree salads.
  • Completion of a re-image design, both interior and exterior, in conjunction with prominent design firm, Brand Architecture, which will more fully incorporate the company's proprietary brand spokesman, "Jack," into the restaurant experience.
  • Preliminary design development of a new restaurant prototype.
  • Reduced reliance on discounting.
  • Added conveniences, such as a more sophisticated point-of-sale (POS) system that permits credit/debit card purchases, resulting in higher check amounts.
  • A product-deletion initiative that refocuses the menu on premium items and that simplifies kitchen procedures to support faster and more consistent service.
  • Improved mystery-guest program that can better assess the restaurant experience from a guest point of view.
  • Development of new recruiting tools and rollout of computer-based training in the restaurants.
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