Portillo’s Inc., as it enters new markets in the Sun Belt states, has shifted away from the “Big Bang” openings to more measured, metered opening cadence, executives said Tuesday.
Michael Osanloo, Portillo’s CEO, and Michelle Hook, the brand’s chief financial officer, outlined growth strategy during the Chicago-based fast-casual concept, which has 85 restaurants, at the BofA Securities Consumer & Retail Conference.
“One of the things that we've worked hard on is we used to have this philosophy of a ‘Big Bang opening’ — you want as big of an opening as possible,” Osanloo said. “The problem is it's not good for our business.
“We have we had openings that we were doing $450,000 a week,” he said. “It was actually not a good experience for the team, not a good experience for the guests. Guests would wait an hour in line to get food that wasn't well prepared. You would turn over the entire team in that first week. It was a horrible experience.”
Portillo’s Inc. opened its first restaurant in the Lone Star State market on Jan. 18, 2023, in The Colony, Texas, and it averaged $48,000 in sales a day.
“We have very purposefully metered that down,” Osanloo said. “I don't want a huge Big Bang opening. There's already going to be excess demand for us. We're still going to have really big openings, but we try to take some of the pressure and the steam off that opening.”
Osanloo said as Portillo’s expands, it wants to build in two weeks of what it calls a soft opening for friends and family, invited guests, first responders, local politicians, and people who've signed up for the brand’s birthday club — its loyalty club.
“We invite all of those people for the first two weeks to take some of the pressure off the restaurant so that when the restaurant opens it's able to handle the volume,” Osanloo said, adding that the pace worked well with the opening of the Orlando, Fla., market in June 2021 and Portillo’s wants to use that as a playbook.
“We did not turn on all of our channels right away,” he said. “We only had on-premises turned on for Orlando when it opened. After a year, we then started taking third-party delivery orders, delivery orders and catering orders. Orlando is showing a sort of a cycle that makes a lot of sense to me.”
Osanloo said Portillo’s, which first opened in Chicago in 1963, “is in some ways a little bit of a unicorn.”
The brand offers Chicago specialties like Chicago-style hot dogs and Italian beef sandwiches also as well as a more traditional limited-service menu.
Osanloo said Portillo’s has a bit of a crafty side to its menu mix. “The sneaky thing on our menu are our salads,” he said. “Most people wouldn't know we sell on average $650,000 of salad per restaurant.”
The company is rolling out nationally at the end of March a new spicy chicken chopped salad. “We're excited about it,” Osanloo said, “We think it fills a gap in our portfolio. It's a whole lot of flavors. It's a whole lot of spicy deliciousness. Part of what makes us an amazing company is the breadth of our menu.”
An average Portillo’s does $3.5 million in sales in the drive-thru, $4.2 million on-premises and $1.2 million in delivery. Other revenue streams include catering and direct shipping. Average unit volumes are $9.1 million per restaurant, he noted.
Hook said funding for growth is financed with cash flow in 10 states. The company has plans to enter Atlanta, Denver, Colo., and Las Vegas, Nev. The company has committed to 12% to 15% unit growth per year. It sees growing to 900 domestic units, scaling to six to eight restaurants in a market at minimum.
Update March 3, 2024: This story has been edited to correct a misspelling on Michelle Hook's last name.
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