Popeyes’ Strategy, 4 Things to Consider

 

By Tricia McKinnon

Popeyes can be attributed with making the chicken category at fast-food restaurants a bigger draw. Consumers love Popeyes’ tasty crispy chicken sandwich so much that many fast food chains have scrambled to create copy cats in what has been called the “chicken wars.” But Popeyes is not sitting still it knows that a great chicken sandwich is not enough. If your curious about what Popeyes is doing to keep up with the competition here are four elements of its strategy for success.

1. An expanded menu. In 2019 Popeyes introduced a crispy chicken sandwich that was so successful it sold out within two weeks and helped Popeyes’ same store sales to increase by a record breaking 34% in the fourth quarter of 2019.

On the back of that success Popeyes has introduced several new chicken menu items including a Buffalo Ranch Chicken Sandwich, a Blackened Chicken Sandwich and Ghost Pepper Wings. "Given the product's success, wings are now back on the menu as a permanent item. And you can expect to see more innovation from us in this fast-growing category," said Joshua Kobza, CEO of Popeyes’ parent company, Restaurant Brands International. "Menu innovations have really taken Popeyes to the next level," says Jourdan Daleo, Popeye’s senior vice president of field operations. Recently Popeyes added dessert biscuits and mango lemonade to its menu to draw in more customers.

2. Better back of the house operations. Adding that famous chicken sandwich as well as chicken nuggets to Popeyes’ menu added a lot of complexity to Popeyes’ kitchen. Now Popeyes is focused on making sure its kitchens are more efficient and less complicated to operate. "We know guests love our food when we get it right. But frankly, it isn't easy to do. Our team members tell us and I've experienced it firsthand when working back of house," said Kobza. "We know restaurants drive much higher sales, traffic, and profitability when they have great operations. So this part of the plan is designed to help more restaurants be in that top tier."

“If you go back five years, if you think about it, all we served was bone-in chicken and strips,” Kobza said. “We’ve doubled the number of proteins with filets for the sandwiches and nuggets. That’s added a lot of complexity.” "The good news is that we have a pretty clear and complete blueprint of how Popeyes can be easier to run from international markets such as Spain, France, and the U.K.," said Kobza. "We're now testing these elements in the U.S. and believe many will become core to our operating plan over the next year or two." “The reason the international versions are so insightful is they came at it with a blank slate,” said Kobza. “It’s been really insightful how they set up the kitchen from scratch instead of adding equipment later.”

Popeyes hopes more efficient back of the house operations will help to increase restaurant level profitability to $300,000 by the end of 2025.

3. Restaurant expansion. In China, the world’s second largest economy, people are big fans of fast food. KFC is one of the most popular fast food chains in the country and Popeyes is looking to emulate some of KFC’s success. KFC already has more than 8,000 restaurants in China and Popeyes plans to open 1,700 restaurants over the next ten years in China.

Popeyes is also planning to open more stores in the United States. The fried chicken chain found through customer surveys the reason why some consumers do not consider Popeyes. “There’s just not a Popeyes close enough to me,” said Sami Siddiqui, Popeyes President speaking about comments made in consumer surveys. “And we think that is a huge opportunity—I view that as my obligation—to build more Popeyes,” said Siddiqui. Popeyes is also expanding in Mexico, the United Kingdom, India, Romania, South Korea and France.

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4. New restaurant formats. Popeyes has realized it doesn’t have to build large restaurants to meet customer needs. “They’re great for the right location,” said Siddiqui. “But I think if we want Popeyes to be really where all of our guests are, then we need to look at smaller footprint locations.” With that in mind Popeyes opened a restaurant in Miami that only serves delivery and mobile order and pay orders. The restaurant does not have any cash registers but does have kiosks where customers can place orders. “And that allows us to redeploy labor,” said Siddiqui. “And it really streamlines the digital experience for our guests. I think it’s those types of formats that we’ve now become a lot more flexible with. Those are going to be the future in terms of how we deliver Popeyes to our guests. It’s not going to be all digital formats. It’s not going to be all ghost kitchens. It’s going to be a balance of everything.”

Expect to see double drive through lanes in many Popeyes’ locations as well as self-order kiosks, digital order pickup shelves and curbside pickup.

Tricia McKinnonStrategy & GrowthComment