COSTA MESA Calif. High unemployment rates, particularly among Hispanics and within El Pollo Loco’s core markets throughout California, were blamed for the chain’s 10.1-percent decline in same-store sales for the third quarter.
Same-store sales fell 9.1 percent at corporate locations and 11 percent at franchise stores. El Pollo Loco, based here, operates or franchises about 415 locations.
Steve Carley, president and chief executive to parent company El Pollo Loco Inc., said the flame-grilled chicken chain experienced its “most challenging quarter to date.”
“The depressed economy and disproportionately high levels of unemployment in our core markets, and in particular among Hispanics, which are a key demographic for our brand, contributed to lower traffic frequency and average check,” he said in a statement Monday.
Carley said efforts to build traffic, such as offering limited-time football-season themed Buffaloco wings and an ongoing “chicken war” with competitor KFC, did not deliver results and “reinforced the dramatic impact the economy is having on consumers’ spending decisions.”
KFC, the 890-unit subsidiary of Louisville, Ky.-based Yum! Brands Inc., last month reported that third-quarter same-store sales fell 2 percent. KFC’s grilled chicken debuted in April and makes up about 30 percent of the menu mix. Chain officials have hailed it as an unqualified success.
El Pollo Loco, meanwhile, will continue to “be keenly focused on striking the right balance between value and check performance,” Carley added.
For the holidays, for example, El Pollo Loco has brought back its popular limited-time tamales promotion, and, through January, the chain is offering a free chocolate fudge or lemon bundt cake with the order of a Flame-Grilled Feast combo meal.
For the 13 weeks ended Sept. 30, El Pollo Loco reported a net loss of $5 million, compared with profit of $48,000 the same quarter a year ago.
Latest-quarter revenue totaled $68.5 million, an 8.5 percent decline from last year.
For the first nine months of the year, the company reported a loss of $33.5 million, partially due to increased income tax expenses of $23 million, compared with a loss of $6 million for the same time frame last year, when the company recorded a tax benefit of $4.1 million.
Revenue for the 39 weeks ended in September totaled $211.8 million, a decrease of 4.8 percent from last year.
Contact Lisa Jennings at [email protected].
