Dive brief:
- Comparable sales of Popeyes in the third quarter of 2021 in the United States fell 4.5%, a decline mainly due to lower traffic as persistent labor issues resulted in reduced hours of service and sales. ‘operation. Late-night hours have been particularly difficult due to the labor shortage, Restaurant Brands International CEO José Cil said on Monday during the company’s third quarter 2021 earnings call. .
- The chain also experienced temporary disruptions to distribution centers in the North East, which impacted 10% of the system.
- The RBI staff shortage also impacted Burger King and Tim Hortons, but workforce issues were most acute in Popeyes, Cil said. Other chains have also experienced service interruptions due to staff issues, including McDonald’s, Wendy’s and Chick-fil-A.
Dive overview:
Popeyes increased its sales by almost 15% compared to the third quarter of 2019 despite the launch of its chicken sandwich. Yet the impact of the labor shortage is hard to ignore.
The Chicken Chain saw about an hour’s reduction in operating hours during the quarter from pre-pandemic levels. This happened most often during the late night hours, which typically attract more family businesses and generate higher checks, Cil said. About 40% of Popeyes’ system operates on a discounted service, offering drive-thru, deliveries, and take-out just because of some of these staffing issues.
Even the launch of the Popeyes nuggets, which helped the company’s business and helped attract new customers and drive checks, was not enough to offset those traffic drops, Cil said. The company plans to enrich this category with the addition of new sauces, such as the new flavor developed with Megan Thee Stallion.
“We are focused on working with our franchisees to mitigate the impact of these challenges going forward,” Cil said. “And while restaurant staffing may take time to improve, we are in the process of further diversifying our distribution network in the region, mitigating the impact of any future disruption of the distribution center on our business. Supply Chain. “
RBI has also created work teams to discuss and share best business practices in staffing. Some operators have already created job fairs and secured a pool of candidates, with good staffing, Cil said. The company collects technology and streamlines operations to bring staff levels to where they need to be to help drive sales.
“We’re looking for ways to make life at a restaurant easier, by looking at the processes, by simplifying the menu,” Matt Dunnigan, RBI’s chief financial officer, said on the call. “There are a number of things that we are working on here to deal with the pressure that we see on our franchisees. But overall the first thing we can do… is generate traffic and respond to requests. needs of our customers and drive sales. “
The chain saw its daytime sales improve slightly or remain stable during the quarter. The company continues to generate more than $ 1.8 million in annual sales per restaurant in the United States despite these challenges, Cil said.
