In the midst of a turnaround plan for its Pollo Tropical and Taco Cabana brands, Fiesta Restaurant Group is finally seeing some traction in same-store sales growth. But traffic continues to decline as the brands struggle to lure more customers, according to Fiesta’s second quarter earnings.
Same-store sales climbed 3.4% for Pollo Tropical and 3.1% for Taco Cabana for the quarter ended July 1. Total transactions, meanwhile, dropped 1% for Pollo Tropical and a whopping 7.1% for Taco Cabana.
Fiesta stock was down about 6% midday Tuesday on the earnings news.
Company executives blame the decline in traffic on a move away from value pricing and other discounts. They’re mulling a variety of ways to boost traffic, including:
- Increasing promotion of and adding items to the crispy chicken platform at Pollo Tropical, a range that currently makes up 15% to 20% of all purchases.
- Using targeted social media.
- Upgrading POS tablets to securely accept credit cards to increase speed of service.
- Testing kiosk-based ordering.
- Piloting a new loyalty program.
- Beefing up the catering program for the holiday season by hiring new catering managers.
- Planning to begin third-party delivery later this year.
- Improving employee training.
Fiesta plans to focus on increasing sales opportunities at existing stores, rather than opening new company-owned or franchised units, Richard Stockinger, company CEO and president, said during a conference call with analysts this week.
“We’re not ready to go full-blown on franchising,” Stockinger said.