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
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.