After seven years with the Del Taco quick-service chain, Steve Brake moved into the position of chief financial officer in April. Previously, he was vice president, treasurer and controller.
Based in Lake Forest, Calif., Del Taco is owned by Sagittarius Brands Inc., along with sister chain Captain D’s. The 515-unit Del Taco chain is known as a hybrid of sorts, with a full menu of Mexican fare, along with burgers, fries and shakes. Brake talked about the challenges ahead.
What are key priorities for Del Taco in 2010, at least from a financial standpoint, and what are your goals in addressing those priorities?
One of the biggest priorities is finding the right balance between increasing transactions without eroding our check average and growth margins. Specifically, this can be achieved by leveraging our current menu, which offers more food and more flavor. It’s about larger portions and abundance; offering more food for the money, or abundance for that price point. We’re very value focused and we offer more flavor, including new flavors like our recently launched Santa Fe chicken. With our new product introductions during 2010, we want to build additional brand regard. Del Taco delivers not only with core value items, but also with premium products like shredded beef, and shrimp and fish tacos.
Many are saying the economy reached a turning point in March. Do you agree?
The recent stock market improvement is definitely a helpful positive indicator, but the continued double-digit unemployment is likely to have a greater impact, particularly for quick service. The credit market needs to loosen up more to help our franchisees with growth.
How are Del Taco’s sales trending so far this year?
Our first-quarter same-store sales increased over 2009, despite severe weather in the West, which impacted transactions.
How is Del Taco reining in costs, and what kind of savings has it achieved?
We are completing a strategic procurement initiative that has provided cost savings in many food and paper categories, as well as operational improvements that will benefit us going forward, such as bringing approved alternate suppliers into our system.
What economic indicators are the most meaningful in assessing the path ahead for Del Taco?
Definitely an improvement in unemployment rates, as well as further stabilization of the housing market, reduced foreclosures. Things like consumer confidence are indicators that follow all of those.
How has your life changed with the promotion to CFO?
Although I have been in key financial roles in the company for several years, this promotion will definitely lead to increased responsibility in terms of driving the brand’s strategy, as well as being a personal career opportunity. It’s shifting more of a focus to defining and driving the future strategy of the brand from a financial standpoint. It was more of an evolution than an overnight change.
What’s your favorite menu item at Del Taco?
The Taco Del Carbon with marinated chicken. I like a lowcarb, high-protein option.
TITLE: chief financial officerCONCEPT: Del TacoHEADQUARTERS: Lake Forest, Calif.YEAR OF HIRE: 2003CHAIN SYSTEMWIDE SALES: $568 Million