Chick-fil-A blessed with increased sales

Chick-fil-A 'blessed' with increased sales | ajc.com

Chick-fil-A ‘blessed’ with increased sales
CEO credits affordable new menu and God for double-digit sales growth

By JOE GUY COLLIER

The Atlanta Journal-Constitution

Thursday, January 29, 2009

Chick-fil-A credited a loyal customer base, affordable prices and menu upgrades for helping it increase sales in 2008. God’s blessing didn’t hurt, either, a company executive says.

The Atlanta-based chicken chain reported Thursday system-wide sales for last year of $2.96 billion, up 12 percent from 2007. The company has increased sales every year since the first Chick-fil-A opened in Atlanta’s Greenbriar Mall in 1967. It was the 16th straight year of double-digit sales growth.
• Photos: New menu | Family business | Cathy tries hand at pizza

Truett Cathy recovering from surgery

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Same-store sales rose 4.6 percent. The company added 83 stores, ending the year with 1,422 outlets.

Chick-fil-A benefited by being a lower-priced option for consumers, said Dan Cathy, Chick-fil-A’s president and chief operating officer.

“We’re not a high-end, plush restaurant with a $30 average ticket,” Cathy said. “Thankfully, we’re a much more affordable part of your day type expenditure.”

He also was quick to thank his customers and God for the year. The Cathy family, which keeps stores closed on Sundays, is known for its involvement in church and faith-based charities.

“I do think that God has blessed our business,” Cathy said.

Among restaurants, the fast-food category is holding up better in the recession than full-service, higher-end eateries. In 2008, U.S. sales at limited-service restaurants rose 2 percent, compared to a 2.5 percent drop for full-service restaurants, according to Technomic, a Chicago restaurant research and consulting firm.

Chick-fil-A is among the fast-food players that are staying ahead of the industry pace. McDonald’s Corp., the biggest fast-food chain in the world, also reported this week a 4 percent increase in U.S. same-store sales and an 8 percent increase in U.S. operating income.

McDonald’s, by the way, cited chicken products as one driver of growth. It introduced last year a Southern style chicken sandwich and biscuit that bears a strong resemblance to Chick-fil-A’s own offerings.

Chick-fil-A, a privately owned company, does not disclose profit data. While sales increased in 2008, the company is being cautious this year, Cathy said.

In 2009, Chick-fil-A expects to add 76 outlets, down slightly from last year. The company has delayed a move by some corporate headquarters employees into new office space.

It also will keep staffing levels even at the corporate headquarters south of Atlanta. Chick-fil-A has a corporate staff of 732 employees.

Chick-fil-A won’t have layoffs and will replace staff members if they leave, but investments and hiring will be focused at the store-level, Cathy said. The chain plans to renovate 65 restaurants this year.

“I think all of our staff knows that against the coming economic backdrop, with where their friends and neighbors are, we’re eternally grateful to have a job and be with a healthy business,” Cathy said. “We want to make sure it stays that way.”

Chick-fil-A is rolling out an initiative designed to take their customer service the “second mile.” The first-mile elements, as Cathy explained, are the basics of the business — a clean parking lot and restaurant, hot fries and a smiling staff.

As part of the second mile, Chick-fil-A is teaching etiquette to employees, starting with training sessions for store operators.

Company employees are already known for responding with “It’s my pleasure” to customer thank yous. As part of the next phase, employees might be walking through the dining room asking customers, “Sir, may I refresh your beverage?”

Chick-fil-A also has new products in the works. In 2008, Chick-fil-A completed an aggressive product rollout that included a new chargrilled chicken and fruit salad, larger chicken strips and a chicken salad sandwich with chunkier meat and new wheatberry bread.

The restaurant chain expects to add a peach flavored milkshake this summer, Cathy said. It’s also testing a spicy chicken sandwich in some markets that could be added in 2010, he said.

“We are always tweaking and refining,” Cathy said. “The challenge you have with a 63-year-old family business is: How do you continue to stay relevant with the customer? How do you continue to reshape the business, retool the business?”

Truett Cathy, Dan’s father, opened his first restaurant, the Dwarf House, in 1946 before going on to create Chick-fil-A.