Cosi has more than a few changes in the oven
The revamp of Cosi is accelerating, with management disclosing plans on May 16 to leave little unchanged at the one-time darling of the fast-casual sector. “After months of practice and trial,” explained CEO Carin Stutz, “we finally figured it out.
Stutz previewed a lengthy list of changes that are intended to make “Cosi easier to use.” The overhauls include what she described as a “more efficient line” and a new kitchen video system.
The menu will be shortened, she explained to investors, but will include such options as bowls made with gluten-free ingredients. The chain has already switched its purchasing contract to a “natural” chicken that costs less than the poultry it had been buying.”
Cosi is also focusing on its beverages, particularly coffee.
A bowl currently showcased as an under-500-calorie choice will be enlarged to deliver more value, and newly installed ovens will enable Cosi to add pizzas, sweetening the concept’s dinner appeal, she predicted.
That phase of the overhaul will commence in late June, said Stutz, who formerly worked for Wendy’s, Applebee’s and Brinker International executive.
She also cited a new build-out design that she described as “an urban spin on a classic café.” The updated prototype is “more attractive for our guests in the afternoon and dinner day parts,” and should have a build-out cost of under $700,000.
The average unit volume for Cosi was $1.2 million in its last full fiscal year, CFO William Koziel. He said the annual intake for the new format could be higher, and described a $1.5-million sales intake as a good return on the build-out.
Existing units will be given a facelift, starting in New York with four stores this summer, Stutz said.
Investors were alerted that at least five of the chain’s 74 company-run stores will likely be shuttered because their losses can’t be stemmed without unreasonable capital investments. Koziel noted that the tally could climb, and Stutz mentioned that other stores will be refranchised to make Cosi more of a franchisor than an operator.
Systemwide comparable store sales fell 4.5 percent for Cosi during the first quarter. The company posted a loss of $2.7 million for the period, compared with a year-earlier loss of $1.1 million.