Portillo’s Inc., the 86-unit Chicago street food concept, plans to continue its push into the Sun Belt, executives said Wednesday.
Michael Osanloo, Portillo’s CEO and president, and Michelle Hook, Portillo’s chief financial officer, presented an outline of the Oak Brook, Ill.-based company’s objectives during the Baird Global Consumer, Technology & Services Conference in New York City.
“It's a 60-year-old brand that grew up in Chicago and, for the first 40 years of its life, it was like five or six restaurants,” Osanloo said.
“Our growth right now is building new restaurants in high-performing markets,” he said. “We loosely have defined our growth target as the Sun Belt, and I'm playing a little loose and fast with geography because we include Colorado in the Sun Belt … the Carolinas, Atlanta … but it's really going where America's population is growing.
“The focus of our growth in the last few years has been Texas, Florida, Arizona,” he added. “Those states have 2% population growth tailwind. The greater Midwest has negative 1%. We're going in places in those states where there's a ton of new growth, great new housing starts and so we want to take a very attractive hugely cash flow positive business in the Midwest and make our investments in the high growth markets across the United States where Americans are moving to.”
Hook said Portillo’s is targeting 10-plus percentage unit growth this year and 12-plus percentage growth in 2025.
“Then in ‘26 and beyond we're targeting 12% to 15% growth,” she said, adding that the brand continues to expand in the Midwest. However, about 80% of the growth is targeted in Sun Belt, she said.
Osanloo said, especially with salad offerings, Portillo’s is well-situated for traffic-challenged periods.
“There's obviously a lot of chatter about the low-end consumer feeling pressure,” Osanloo said. “You definitely see the QSR players engaging in some more active promotional behavior…. The biggest guy, McDonald’s, has stuff on their dollar menu, but they also have really expensive meals with the Big Mac and the quarter pounder etc.
“They have done a really nice job of barbell pricing,” he said.
For Portillo’s, he added, the lower-end consumer tends to be a small portion of the customer base, Osanloo said.
While Portillo’s saw negative traffic in the first quarter, Osanloo said, the brand has added a half hour to open hours in the morning, opening at 10 a.m., and a number of units have lengthened hours in the evening.
“We have restaurants that are open till 1 a.m.,” he said. “That helps. We have innovated on our menu to add what we think are some traffic drivers. … We added two salads that we think are really targeting specific consumers. We have a spicy chicken chop salad with bolder flavors and then we have an elevated salad which is a mixed green salad with a grilled chicken pecans and a fantastic dressing.”
Portillo’s has also returned to TV advertising in some markets, he said.
“When the Chicago Bears are on TV, it really works in Chicago-land,” Osanloo said. “We have bought a bunch of ads starting with their preseason games going through the season. And it's not discounting but just to remind people that they love Portillo's.”
Portillo’s is working on what it calls “the restaurant of the future,” which will be about 1,500 square feet smaller than current builds, he said.
“We're building about 7,800 square feet today,” he said. “We're going to pivot to building 6,300 square feet starting in Q4 and forward. And so that's going to take at least $1 million off the build cost.”
Hook said unit investment costs could be reduced to from $7 million to the low- to mid-$5 million range.
“We're starting to put shovels in the ground,” she said, adding that bids are “coming in at the low end of the range.”
Hook said runs newer restaurant shrinks the kitchen size. “If you go into a restaurant in Chicago,” she said, “you may see a kitchen line that's 100 feet long. I mean it is long and there that's a lot of walking back and forth kitchen. What we're building now shrunk that to about 65 feet. The restaurant in the future takes it to about 47 feet.”
Portillo’s, founded in 1963, has fast-casual restaurants in 10 states.
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