Simplification is the key word at El Pollo Loco as the chicken chain looks to decrease operational complexity in its kitchens.
To that end, the Costa Mesa, Calif.-based chain announced Thursday in a call with analysts that it has shrunk its menu by 20% to eliminate “lower-mixing, lower-margin” items, CEO Bernard Acoca said.
The 484-unit chain is also testing new cooking procedures, marinating processes and a holding cabinet to further simplify back-of-house operations. El Pollo Loco has also hired a design firm to develop a “restaurant of the future” prototype, expected to be completed by the fall.
“Everything we do in our kitchens is being reevaluated in order to make things easier for our team members and franchisees,” Acoca said. “We’re convinced that improved operations can significantly enhance our employees’ ability to provide better food and service to our guests, all while having the added benefit of lowering turnover and increasing retention, which is particularly important in today’s tight labor environment.”
El Pollo Loco reported same-store sales growth of 2.4% for the quarter ended March 27. That growth came from a 4.6% increase in average check to offset a 3.1% dip in traffic. Total revenue increased 3% to $109 million.
The smaller menu was tested in Los Angeles units for several months, Acoca said, before being implemented systemwide.
“We didn’t see any degradation in transactions driven by the simplification of our menu,” he said.
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