GOLDEN Colo. After a difficult fiscal year, Good Times Restaurants Inc. is hoping for better results in 2009 by repositioning itself as a higher-quality burger brand and by avoiding the discounting of its larger fast-food competitors.
Beginning this month, the 54-unit Good Times Burgers & Frozen Custard chain said it would make all of its hamburgers from all-natural Angus beef, and make the patties 10 percent larger. Good Times also will offer a honey-cured bacon burger, hand-breaded onion rings, fresh-cut fries and freshly squeeze lemonade. The chain will overhaul its chicken sandwiches and refine its frozen custard treats.
In addition, Good Times said it would will lower the price of its core burger by between 10 percent and 20 percent, while increasing the prices of its premium products.
“This is the most difficult environment we have ever operated in,” president and chief executive Boyd Hoback said in a letter to shareholders, which was filed with securities regulators last week. “We are very disappointed in our 2008 results and it demands that we make big, bold, substantive moves in order to redefine our core value proposition for the consumer and to position our concept for future growth.”
Good Times will bring “real food back to fast food,” he added.
The changes would bring Good Times into territory mostly held by Hardee’s and Carl’s Jr. chains, both of which are operated or franchised by CKE Restaurants Inc. in Carpinteria, Calif. CKE has weathered the economic downturn better than many quick-service chains with a focus on premium products like the Six Dollar Burger and the Thickburgers. Many other burger brands have employed a two-tier menu strategy that includes both premium products and lower-priced value items.
According to Good Times’ Hoback, “Being a ‘little better’ against powerful brands is not sufficient,” especially as consumers prove to be more price-sensitive amid the country’s deepening recession. Decreased customer traffic and spending, coupled with increased food and paper costs, cut in to Good Times gross profit margin.
The company closed out its fiscal 2008, which ended Sept. 30, with a net loss of $1.1 million, or 28 cents per share, versus a profit of $29,000, or 1 cent per share, a year earlier. Fiscal 2008 revenues rose 3.7 percent to $25.9 million. Annual same-store sales fell 1.5 percent, which reflected quarterly same-store sales drops of 5.7 percent and 10.8 percent in the third and fourth quarters, respectively.
The company also said it would slow development in 2009. It suspended the development agreement with investors Zen Partners LLC, which had called for new locations in Nebraska and Colorado.