El Pollo Loco, a popular restaurant chain inspired by Mexican cuisine, is planning major improvements to enhance dining for its customers and grow its brand nationwide. CEO Liz Williams announced that the company will implement five significant changes to improve customer experience.
Currently operating primarily in the Western states, El Pollo Loco is setting its sights on becoming a favorite dining option nationwide.
El Pollo Loco's New Strategy Under CEO Williams
Just two months after becoming CEO of El Pollo Loco, Liz Williams has already devised a bold five-part strategy to boost sales and growth while cutting costs.
During a Thursday earnings call, Williams detailed these plans designed to enhance the brand's visibility and customer experience, embrace a digital-first approach, improve profitability at individual restaurants, and reduce the costs of building new outlets.
Williams expressed confidence in the company's direction, stating, "El Pollo Loco should be and will be a national brand, and I believe we have the right strategy to achieve our immense potential," as reported in an earnings release.
The strategy seems to be paying off already. El Pollo Loco reported a significant increase in same-store sales, which rose by 5% in the first quarter. This performance marks an improvement of 0.9% in same-store sales in the previous year's fourth quarter.
Additionally, the restaurant's contribution margins increased to 17.6%, up from 15% in the same quarter last year, while revenue climbed to $116 million from $114.5 million in the prior year's quarter.
This comprehensive strategic update, as noted in a report by Retail Drive, highlights El Pollo Loco's ambitious plans to expand its presence and refine its operations under Williams' leadership.
El Pollo Loco Sharpens Brand Focus
Williams is focusing on the chain's strengths-grilled chicken and Mexican flavors-known for their quality and freshness to drive growth.
She emphasized the importance of using traditional and digital channels to communicate these attributes better and attract more customers.
The company is working on speeding up operations and reducing complexity, such as introducing new salsa-making equipment and ordering kiosks, which help decrease labor costs. El Pollo Loco is upgrading its digital services, including a revamped loyalty program to streamline processes.
Financially, Williams aims to return to higher profit margins by closely managing costs related to goods and utilities, ensuring the customer experience is not compromised.
El Pollo Loco is reducing the costs of new outlets to aid franchise growth. The current setup costs are deemed too high at $2.2 million. The company is working with partners to decrease these costs and has launched a new incentive program to support its franchise network, reports QSR Magazine.
El Pollo Loco opened its first U.S. store in Los Angeles in 1980, five years after launching in Mexico. Despite a simple initial offering of chicken, tortillas, and salsa, it quickly succeeded, grossing $125,000 in its first month.
Now, with 487 locations in the Southwest, El Pollo Loco has faced challenges expanding beyond this region.
However, the new CEO is optimistic and aims to make El Pollo Loco a national brand. During a recent earnings call, she expressed confidence in her strategy. The chain competes with significant brands like Chipotle, Taco Bell, and Del Taco.
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