El Pollo Loco Holdings, Inc. (LOCO - Free Report) relies heavily on menu innovation as one of its primary strategies to drive traffic and incremental sales. To this end, the company announced the launch of $5 Craveable Combos, which serves a combination of Handmade Chicken Taquitos, three other entrées, chips and a drink for $5 for a limited time.
This is in line with the company’s aim to introduce a differentiated menu to drive traffic and counter competition in the fast food space. The combo will contain nutrient-packed ingredients combined with El Pollo Loco’s signature flavors and are a healthier alternative to typical fast food.
Notably, the company’s strong sales-building strategies and unique brand positioning led its shares to gain 20.2% so far this year, outperforming the industry’s collective growth of 0.7%.
Menu Innovation and Other Sales-Building Efforts
The move underscores El Pollo Loco’s efforts to develop its menu for health-conscious customers. El Pollo Loco expects to boost comps through the continuous innovation of popular menu items. The company’s relentless focus on providing excellent service and reasonable pricing is expected to continue driving revenues. Banking on menu innovation, limited-time offers and a strong brand positioning, the company witnessed year-over-year sales growth of 5.7% in the last-reported quarter.
Meanwhile, El Pollo Loco has made a significant progress, with various technology initiatives designed to provide convenience to loyalty customers. Recently, the company initiated a partnership with DoorDash, which currently covers 80% of El Polo Loco’s system-wide locations.
Continuous Innovation to Fend Off Competition
The fast-food space is highly competitive and each of the restaurant giants is banking on innovation to hold their spaces. In order to keep up with food giants like Yum! Brands, Inc. (YUM - Free Report) , McDonalds Corporation (MCD - Free Report) and Domino’s (DPZ - Free Report) , it is important for this Zacks Rank #3 (Hold) company to continue improvising the menu, re-imaging stores and offering loyalty programs.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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