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Sales, traffic rebound at Krystal

Sales, traffic rebound at Krystal

Product bundling, promotional pricing drove traffic increase at end of 2012, CEO says

Burger chain Krystal says sales and traffic increased for the first time in years during the last six months of 2012, which its chief executive attributed to product bundling and promotional pricing.

“We believe improvements were driven by three primary initiatives,” president and chief executive Doug Pendergast wrote in an email. “We shifted our promotional focus on both the individual and sharable bundles of our products, and we sharpened our promotional pricing.”

For instance, 10 Krystals, or sliders, were priced at a promotional $5.99, which resonates with consumers, Pendergast said.

Additionally, the quick-service chain added several limited-time offers in early 2013, which intended to drive customer interest and traffic. New items included a limited-time Philly Cheese Krystal — a burger topped with melted white cheese, grilled onions and peppers — and the Krystal Fish, a sandwich of fried Alaskan pollock topped with tartar sauce.

Krystal’s focus on promotions bucks 2012 trends, when deals and discounts didn’t drive traffic as much as in prior years, according to research by The NPD Group. The research firm found that in 2012, restaurant visits driven by deals declined 3 percent year-over-year.

Still, Pendergast said that by honing pricing and the types of deals Krystal offered, the chain was able to drive traffic.

In October, Pendergast discussed Krystal’s performance with Nation’s Restaurant News, stating that while several things were new at the brand, its core values hadn’t changed.

“Not a tremendous amount has changed from the vantage point of our customers other than that we’ve had a couple of big promotions to sell Krystals in 12 and 24 packs,” he said at the time. “We also have a promotion where you can get a three-Krystal meal for $2.99. That’s driven significant lifts in customer count and sales.”

He added, “From the customer perspective we’re just trying to be faster, friendlier and cleaner.”

Pendergast declined to discuss specifics sales and traffic numbers at Krystal’s 350 locations.

Now, the chain is poised for unit growth, Pendergast said. “We are now a company that is well positioned and prepared for expansion,” he said in a statement.

Krystal plans to open 10-15 new units throughout 2013, Pendergast said, with the hopes of having 500 total locations within the next four years.

Last year was Krystal’s first under the ownership of Atlanta-based private equity firm Argonne Capital Group, which purchased the chain in March 2012. Chattanooga, Tenn.-based Krystal Co. plans to complete its move to Atlanta by the end of the summer.

Contact Erin Dostal at [email protected].
Follow her on Twitter: @ErinDostal

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