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2018 Top 200: Unit-Level Trends Del Frisco's

2018 Top 200: Heightening experience at the unit level

Chains drive unit volumes by focusing on what matters most to their customers

This is part of the Nation’s Restaurant News annual Top 200 report, a proprietary ranking of the foodservice industry’s largest restaurant chains and parent companies.

Chains that create luxurious food and experiences — Del Frisco’s Double Eagle Steak House and Mastro’s Steakhouse/Ocean Club — had the highest Estimated Sales Per Unit in the Latest Year, respectively, but the three brands with the greatest ESPU growth were a Chicken chain, a Bakery-Cafe giant and a Beverage-Snack brand.

Del Frisco’s had the highest ESPU in the Latest Year, $14.1 million, an increase from $13.9 million the Preceding Year. In 2017, parent company Del Frisco’s Restaurant Group Inc., which has two other brands, Del Frisco’s Grille and Sullivan’s Steakhouse, honed in on each one’s unique offerings and got specific on the customers it was trying to attract.

Norman Abdallah, CEO of Del Frisco’s Restaurant Group, said in January 2017 that the company would achieve its strategic vision with the appointment of brand presidents for each chain. Ray Risley was named president of Del Frisco’s Double Eagle Steak House, Scott C. Smith was named president of Sullivan’s Steakhouse and Brandon Coleman III was named president of Del Frisco’s Grille later, in September 2017.

“As we continue to focus on driving guest traffic and long-term value for shareholders, we believe that highlighting our three separate and distinguished brands will benefit our overall performance,” Abdallah said.

Considering customers, Del Frisco’s said it would focus on “Social Scenesters” and “Experienced Spenders.” The former are customers for whom going out with friends and a lively atmosphere are important. They also make up 29 percent of Del Frisco’s customers, according to research conducted by Bain for the company. The latter are customers who prefer restaurants with a high level of service, and for whom price is of little concern.

“Our new branding incorporates and puts into action the consumer insights we gained through our research projects,” Abdallah said in October 2017 during a third-quarter earnings call. “And our new menus have been rigorously tested at various restaurants since June, with learnings built into our national rollouts.”

However, during that quarter, Del Frisco’s reported a loss of $1.8 million and a decline in same-store sales at all three brands. Revenue rose 2.7 percent.

In terms of ESPU growth, Raising Cane’s Chicken Fingers led the Top 200, with a 9.9-percent increase in the Latest Year. The chain has been on a tear for several years, growing rapidly not only in ESPU, but in systemwide sales and unit count as well. It’s also a customer favorite, appearing in Nation’s Restaurant News’ annual Consumer Picks survey.

Rather than attempt to be all things to all people, Raising Cane’s is known for its simple menu of chicken fingers, fries, Texas toast, coleslaw and proprietary Cane’s sauce. It also sets itself apart by making chicken batter, coleslaw and sauce in house, and focusing on service.

Panera Bread recorded the second-highest ESPU growth in the Latest Year, 8.4 percent, amid a big year for the Bakery-Cafe chain. Most notably, in July 2017, JAB Holding Co. completed its acquisition of Panera Bread in a deal valued at approximately $7.5 billion. JAB Holding Co. is a privately held German conglomerate that is based in Luxembourg.

Panera Bread continued to focus on digital and delivery, reaching $1 billion in digital sales in June 2017 and planning to create more than 10,000 new delivery jobs as of the end of 2017.

“Panera is doing for delivery what we did for quick service — creating an elevated guest experience end-to-end,” Ron Shaich, Panera founder, chairman and CEO said last spring. “In many places across the country, all that’s available for delivery is pizza or Chinese food. We’re closing the gap in delivery alternatives and creating a way for people to have more options for real food delivered to their homes and workplaces.”

On Jan. 1, Shaich stepped down as CEO and Blaine Hurst, president of Panera Bread, took the CEO role. 

Read more:
2018 Top 200: Estimated Sales Per Unit
2018 Top 200: Growth in Estimated Sales Per Unit
2018 Top 200: Unit Performance

Contact Marcella Veneziale at [email protected]   

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