Thanks to two years of hard work, menu upgrades, and improved speed of service, fast casual McAlister’s Deli is truly reaping rewards. The recently released third-quarter results showed that the more than 300-unit brand reached its ninth consecutive quarter of positive comparable sales growth.
And it all started when president and CEO Frank Paci came on board in 2010. Though Paci says a more stable economy has helped the brand improve sales and growth, he acknowledges that it was the chain’s focus on menu changes and service upgrades that truly made the difference.
“We upgraded the quality of virtually all of our proteins,” Paci says, pointing to the new and improved Black Angus roast beef, Black Forest ham, and all-natural chicken. McAlister’s also launched upgraded salad and grilled sandwich lines, and introduced focaccia and ciabatta bread, while also switching from white hoagie rolls to baguettes.
“By the time you look across the menu, what you find is almost every product was touched by our upgrading the ingredients,” Paci says. He adds that the improved product line, which includes new items like the Pepper Jack Turkey Grilled Sandwich and the Horseradish Roast Beef & Cheddar Sandwich, likely helped spur the 5.8 percent increase in entrée sales during the quarter.
Heading into 2013, menu developments will keep coming, with a Cajun Shrimp Po’Boy Sandwich, wrap, and salad making their debut in Q1.
McAlister’s will also be shining the spotlight on an old and often-forgotten menu staple: spuds. Paci says the focus on shrimp and potato products is helpful for the brand and franchisees, as these items won’t be affected by expected commodity price increases.
“We hadn’t had a lot of menu developments the few years before Frank had come onboard, and we really needed some more options, more healthy options, to diversify the taste profile for our customers,” says franchisee Yaron Goldman.
“McAlister’s really has done a good job of providing better-quality items, and we’re able to get it out to the customer faster with some new equipment that we’ve been putting in our kitchens and new systems with technology.”
Apart from menu development, the brand has also spent the past couple of years examining ways in which to improve its speed of service. Paci says the chain’s market research showed that customers who have to wait longer than five minutes for food reported lower customer-satisfaction ratings.
And for a brand that incorporates a casual dining–inspired service model—where employees deliver food straight to customers’ tables, refill drinks, and bus tables—into a fast-casual format, cutting down service times was a much-needed focus.
“A lot of our business comes from lunchtime, and a lot of people are limited with the time they have,” Paci says. “If it’s taking too long and you’re not able to enjoy your lunch, it’s something that’s degrading the experience.”
To solve the problem, the brand began using kitchen display units and new technology systems in stores to speed up service.
Goldman says the new equipment has helped his stores cut ticket times from almost eight minutes to as little as four.
And the brand’s franchisees have felt the resulting positive effects. In the third quarter alone, franchise restaurants saw same-store sales rise by 7 percent.
“Based on the momentum that we’ve seen in the business, we’ve got franchisees who have not been developing additional stores now talking about developing additional units,” Paci says. “That’s the exciting part. … To me, that says that they feel good about the brand.”
Goldman, who’s been with the company since the late ’90s, has expanded his business to 34 units, with the 35th location to open in early 2013 in Clemson, South Carolina. He says his business has seen 32 months of same-store sales growth.
“There’s a lot of opportunities for development with McAlister’s if the franchisees are willing to step up and buy the territory and build the units,” he says.
By Mary Avant