Chuy’s: Guest-centric culture keeps turnover down, sales up

Chuy’s: Guest-centric culture keeps turnover down, sales up

AUSTIN Texas Chuy’s [3] general manager, Kathleen Marburger has never made labor and food costs her main focus. She worries about people first, and these recessionary times haven’t changed her strategy. —In her 12 years as a

“Of course, I have to make a profit, but that is not what I teach,” Marburger said. “The rule is: Do everything you can for the customer, keep the restaurant impressively clean and organized, and have fun. That’s it. Every decision I make goes back to that rule.” —In her 12 years as a

Marburger’s location in Austin and the other 11 Tex-Mex Chuy’s restaurants average between $4 million and $5 million in annual sales from a $12 check average. The Austin-based chain added four units in 2008 and saw a 3-percent uptick in customer traffic, said president Steve Hislop. —In her 12 years as a

While some operators in the casual-dining segment struggle with falling traffic and lower spending by those customers who do visit, operators such as Chuy’s say they are experiencing positive gains by maintaining a strong workplace culture that keeps employees engaged and focused on customer service. —In her 12 years as a

“It’s all attitude,” Hislop said. “Every day, all you hear is: costs, costs, costs, cutting, cutting, cutting. But we are adding on. Our restaurants are like when you had Sunday dinner with Mom. Everybody gathers together and has fun. That’s what we believe in and what we teach. We ignore everything else.” —In her 12 years as a

Casual-dining concepts with highly engaged employees typically outperform financially those where employees are disengaged, said Frank Rowe, vice president of PeopleMetrics, a Philadelphia-based research firm that tracks employees and consumers. —In her 12 years as a

“Employee engagement matters, especially in this economy—even more than in an up economy,” Rowe said. —In her 12 years as a

A PeopleMetrics 2007 study of nine publicly traded restaurant chains revealed that those with engaged employees rated higher on customer engagement and registered increases in earnings per share, while those with low employee and customer engagement saw decreases in earnings per share. —In her 12 years as a

Business owners and managers need to understand what drives employee engagement and disengagement, Rowe said. —In her 12 years as a

“It’s not necessarily pay and benefits,” he said. “It’s really more tied to emotional drivers of engagement. It’s things that include trust in leadership, growth within the organization, having a customer focus and also being empowered to do one’s job.” —In her 12 years as a

The goal is to make employees feel like family, said Hislop, a strong advocate of workplace culture and former president and chief operating officer of Nashville, Tenn.-based O’Charley’s. —In her 12 years as a

“We trust the people we hire,” he said. “Our customers also feel like they own the restaurants they go to. We average 9,000 customers a week—that’s a ton of repeat guests. Managers like Kathleen, who has run her store for 12 years, know every one of our guests. It’s a community.” —In her 12 years as a

Chuy’s was started in 1982 by partners Mike Young and John Zapp who grew it to eight units before selling a stake of the company to New York-based private-equity firm Goode Partners LLC at the end of 2006. The cash infusion is helping to fund the growth. Chuy’s expects to open five to six more stores this year. Currently, all of its units are in Texas. —In her 12 years as a

Hislop was brought on board in 2007 to help grow the chain. During his tenure at O’Charley’s, the chain had 32 consecutive quarters of same-store sales increases. —In her 12 years as a

To prepare for expansion, Chuy’s doubled the length of its management-training program to ensure new managers were “Chuy-ized,” Hislop said. —In her 12 years as a

In addition to the standard 12-week management training, managers go through a second 12-week session of culture training. —In her 12 years as a

“It’s a pretty big commitment, but if you don’t do it in the early stages of growth, it will backfire on you,” Hislop said. “You will grow as fast as your people let you grow.” —In her 12 years as a

Chuy’s also holds culture club meetings every quarter for employees in English as well as Spanish for the chain’s large Spanish-speaking population. Topics for the meetings often include the history of Chuy’s and facts about the Mexican artists who make the wooden fish and metal palm trees that are a major part of Chuy’s decor. Each Chuy’s has its own look. —In her 12 years as a

The strong culture has led to low turnover rates—less than 100 percent for hourly employees and only 14 percent for managers, said Marcia Williams, human resources director and a 16-year veteran of the chain. Turnover among the back-of-the house staff is less than 50 percent. —In her 12 years as a

The culture training focuses on Chuy’s philosophies and resonates with managers, Williams said. —In her 12 years as a

“I’ve had the privilege to talk to restaurant management candidates who want to run a restaurant and be proud of the food they serve, be a part of the community and do what’s right and fair with employees and be in a place where they feel they are going to be fairly treated,” Williams said. “They crave a place like Chuy’s.” —In her 12 years as a