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Fiesta eyes kiosk test, plans to pilot loyalty program

Fiesta eyes kiosk test, plans to pilot loyalty program

Company reports positive 2Q same-store sales at Pollo Tropical, Taco Cabana

Fiesta Restaurant Group Inc., parent to the Pollo Tropical and Taco Cabana concepts, will be testing in-store kiosks and investing in program to increase off-premise sales, executives said Monday.

Leaders at the Dallas-based fast-casual company, which reported positive same-store sales at both of its concepts in the second quarter, said they are also planning to pilot a new loyalty program in the third quarter.

“We will be testing kiosks at a few restaurants this year that may help to decrease cost, increase ticket average and improve accuracy,” said Danny Meisenheimer, Fiesta chief operating officer, on a second-quarter earnings call.

In addition, Meisenheimer said the loyalty program would tie into off-premise sales.

“We have hired an experienced off-premise leader to spearhead a successful implementation strategy across catering, third-party delivery and gift card sales,” he said. “We're refining our catering program ahead of the holiday season and are in the process of hiring catering managers who will be solely focused on growing our catering business.”

Meisenheimer said the company is discussing partnerships with third-party delivery vendors and expects a pilot test later in the year.

“Taken together, we believe that the investments we are making in building our off-premise business should be fully in place and gaining traction by year-end 2018,” he said.

At Taco Cabana, the earlier introduction of all-day breakfast continues to build traction, said Richard Stockinger, Fiesta’s CEO and president.

“Our TC Patio Program has already been rolled out to approximately 40 restaurants, with some additional locations to follow,” Stockinger said. “Revisiting our roots as the original Mexican patio café, we have amplified our patio with patio parties, with entertainment including musicians, karaoke, game nights and other fun activities for our guests.”

As part of the patio marketing, Taco Cabana has also added several new alcoholic beverages, including frozen raspberry vodka lemonade, draft beer and sangria in seasonal Margaritas as well as shareable appetizers.

Stocking said the profile of the typical Taco Cabana guest has been shifting as the brand works on the quality of its offerings.

“There is no doubt that our guest profile has been changing,” he said. “We're seeing more families and younger people coming to our restaurants.”

For the second quarter ended July 1, Fiesta swung to a profit of $9.5 million, or 35 cents a share, from a loss of $2.2 million, or eight cents a share, in the same period last year. Revenues increased 2.4 percent, to $176.8 million, from $172.6 million in the prior-year quarter.

Same-store sales at Pollo Tropical increased 3.4 percent, the second consecutive quarter of positive comparable restaurant sales. Same-store sales at Taco Cabana increased 3.1 percent, the first quarter of positive comparable restaurant sales since the second quarter of 2016.

The Fiesta system has 358 restaurants, including 180 Pollo Tropical units and 178 Taco Cabanas. Of those, 320 are company-owned.

Lynn Schweinfurth, Fiesta chief financial officer, said the company expects this fiscal year to open seven new company-owned Pollo Tropical restaurant openings in Florida, four of which had already been opened as of the end of the second quarter.

“We also expect seven new company-owned Taco Cabana restaurant openings in Texas, six of which have already been opened as of the end of the second quarter and one that opened in July,” Schweinfurth said.

Stockinger said the company is working on the groundwork for a franchising program, but it has no immediate plans to make that a focus.

“We're not ready to go full-blown on franchising,” Stockinger said, but he added that he did foresee opportunities.

Contact Ron Ruggless at [email protected] 

Follow him on Twitter: @RonRuggless

TAGS: Finance
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