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El Pollo Loco Continues With Menu Innovation to Drive Growth
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El Pollo Loco (LOCO - Free Report) started the year with the introduction of four ‘Under 500 Calories’ menu items.
This is in line with the company’s aim to introduce a differentiated menu to counter intense competition in the fast food space. ‘Under 500 Calories’ items will feature nutrient-packed ingredients combined with El Pollo Loco’s signature flavors and are a healthier alternative to typical fast food.
We observe that El Pollo Loco’s stock has lost 26.6% in the past six months as against the industry’s gain of 4.3%.
Menu Innovation to Drive Traffic & Comps
Given a challenging sales environment, it is imperative for restaurants to understand customers’ tastes and preferences. With consumers opting for healthier alternatives, the ‘Under 500 Calories’ is expected to meet consumer needs and improve overall traffic. This in turn is likely to drive comps.
El Pollo Loco expects to boost comps through continuous innovation of popular menu items. Reasonable pricing and excellent customer service are other positives. The U.S. restaurant industry has been under the weather over the past few quarters as continued softness in consumer spending on dining out has dented sales. Resultantly, comps growth has been weak. Foot traffic also declined, denting profits at many restaurants.
Meanwhile, in order to keep up with food giants like Yum! Brands, Inc. (YUM - Free Report) , McDonalds Corporation (MCD - Free Report) and Papa John’s International, Inc. (PZZA - Free Report) , it is important for El Pollo Loco to continue improvising the menu, re-imaging stores and offering loyalty programs.
In fact, menu innovation and a strong brand position helped drive traffic for the company in the last two quarters.
Other Initiatives to Drive Sales
El Pollo Loco is known for its sales-building initiatives. The company’s relentless focus on providing excellent service through advertising campaigns is expected to boost comps further.
In addition, El Pollo Loco has made significant progress with various technology initiatives, designed to provide convenience to loyalty customers. In June 2017, the company had initiated a partnership with Olo's Dispatch Delivery service, which covers 40% of El Polo Loco’s system-wide locations. The company expects technological and delivery initiatives to be major sales drivers in the quarters ahead.
To Conclude
Despite the company’s sales-boosting efforts, high labor costs, pre-opening costs of outlets and expenses related to the execution of various initiatives are expected to keep profits under pressure.
Nonetheless, continual menu improvisation and aggressive marketing are likely to drive sales.
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
El Pollo Loco Continues With Menu Innovation to Drive Growth
El Pollo Loco (LOCO - Free Report) started the year with the introduction of four ‘Under 500 Calories’ menu items.
This is in line with the company’s aim to introduce a differentiated menu to counter intense competition in the fast food space. ‘Under 500 Calories’ items will feature nutrient-packed ingredients combined with El Pollo Loco’s signature flavors and are a healthier alternative to typical fast food.
We observe that El Pollo Loco’s stock has lost 26.6% in the past six months as against the industry’s gain of 4.3%.
Menu Innovation to Drive Traffic & Comps
Given a challenging sales environment, it is imperative for restaurants to understand customers’ tastes and preferences. With consumers opting for healthier alternatives, the ‘Under 500 Calories’ is expected to meet consumer needs and improve overall traffic. This in turn is likely to drive comps.
El Pollo Loco expects to boost comps through continuous innovation of popular menu items. Reasonable pricing and excellent customer service are other positives. The U.S. restaurant industry has been under the weather over the past few quarters as continued softness in consumer spending on dining out has dented sales. Resultantly, comps growth has been weak. Foot traffic also declined, denting profits at many restaurants.
Meanwhile, in order to keep up with food giants like Yum! Brands, Inc. (YUM - Free Report) , McDonalds Corporation (MCD - Free Report) and Papa John’s International, Inc. (PZZA - Free Report) , it is important for El Pollo Loco to continue improvising the menu, re-imaging stores and offering loyalty programs.
In fact, menu innovation and a strong brand position helped drive traffic for the company in the last two quarters.
Other Initiatives to Drive Sales
El Pollo Loco is known for its sales-building initiatives. The company’s relentless focus on providing excellent service through advertising campaigns is expected to boost comps further.
In addition, El Pollo Loco has made significant progress with various technology initiatives, designed to provide convenience to loyalty customers. In June 2017, the company had initiated a partnership with Olo's Dispatch Delivery service, which covers 40% of El Polo Loco’s system-wide locations. The company expects technological and delivery initiatives to be major sales drivers in the quarters ahead.
To Conclude
Despite the company’s sales-boosting efforts, high labor costs, pre-opening costs of outlets and expenses related to the execution of various initiatives are expected to keep profits under pressure.
Nonetheless, continual menu improvisation and aggressive marketing are likely to drive sales.
El Pollo Loco has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>