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How grocers’ rotisserie chickens hurt Boston Market

RB’s The Bottom Line looks at the chain’s infamous history and long decline as consumers get their meal replacements elsewhere.
Photograph by Jonathan Maze

the bottom line

About two decades ago, the late Mike Jenkins brought in a consultant, Ray Coen, to look at the chain we now know as Boston Market.

The fast-casual “home meal replacement” concept had all sorts of issues at the time. But Coen saw a potential long-term problem that many others did not: supermarket rotisseries.

Coen, who had experience working with grocers, knew that many of those companies were taking out some shelves of canned goods and replacing them with more expansive deli counters with rotisseries roasting chickens all day long.

Those cooked chickens were difficult to resist. And they enabled consumers to take a ready-made meal home with them for a relatively small price.

“What I saw was, talking to customers and the public in general, they were going to the supermarkets for the chicken,” Coen told me. “At the time, home meal replacement was still hanging around, and supermarkets were jumping on the bandwagon. But they were a more efficient means of delivering home meal replacement.”

Restaurants have been fretting about grocery store prepared foods for years, but maybe no chain has felt that encroachment nearly to the extent Boston Market has.

That said, it’s too simplistic to say that the supermarket rotisserie killed Boston Market. The chain isn’t dead, after all. It still has more than 400 locations, even after its recent closure of another 45 units.

If anything, Boston Market is a survivor.

This is a chain that almost literally came out of nowhere in the mid-1990s with its rotisserie chickens and homemade sides such as stuffing and creamed spinach. Nothing else was like it.

Boston Market went from 550 locations in 1994 to nearly 1,200 just three years later. That kind of growth is ridiculous. And, it turned out, totally unsustainable.

Peaked in the ’90s: Boston Market unit count by year

Source: Technomic

Boston Market sales by year

Source: Technomic

The company faced lawsuits from shareholders over accounting practices. It filed for bankruptcy protection in 1998 and began closing locations in droves. By 2000, it was back down to about 700 restaurants. Observers got whiplash looking at its growth and then sudden decline.

McDonald’s bought the chain in 2000, in part to get access to its real estate before deciding to keep the company operational. It sold Boston Market to Sun Capital in 2007 as it unloaded noncore assets.

Rapid closures, investor lawsuits, accounting questions, bankruptcy filings, indifferent owners and numerous management changes are a lot to go through for any brand. “When everything is against you and you can do adequate, you’re winning,” Coen said.

Still, it’s difficult to look back at Boston Market’s post-bankruptcy decline and not think about the impact of those supermarket rotisseries.

Today, the grocery store rotisserie is a massive business. Grocers and Costco sold about 625 million rotisserie chickens in 2017, according to the Wall Street Journal. That’s a $3.8 billion business at an average of $6 per chicken.

“They’re really good at it,” Coen said. “Whole Foods, all grocery chains have upped their act to be better at delivering the perimeter fresh food.”

Supermarkets and Costco are both more convenient and offer more value. The chickens cost as little as $5. And there are about 40,000 supermarkets in the U.S., many of them selling rotisserie chickens, to go along with more than 500 domestic Costco locations.

Even at its peak, there were 1,200 Boston Markets.

“It’s pretty tough when you’re trying to do the same thing and less efficiently,” Coen said. (Boston Market sells other proteins, such as turkey and meatloaf, but is still largely considered a chicken concept.)

And so, as supermarkets added rotisseries, Boston Market has struggled.

Since 2001, the chain’s unit count has averaged a 2.4% decline, according to data from Restaurant Business sister company Technomic. Sales have averaged a 1.8% decline. After the closure of the 45 locations, the company is now down to just over 400—300 fewer than when McDonald’s bought the company and one-third the size it was at its peak.

The chain seemed to have found itself, adding units each year from 2014 through 2016, but sales began falling in 2015 as the restaurant industry entered its current recessionary period. Unit closures resumed in 2017, and this week’s announcement sped that up.

More recent declines are likely due to issues facing many other restaurant chains: too many locations, low grocery store inflation, consumers more interested in takeout, and declining retail traffic.

The brand is working on a number of initiatives to improve its convenience and its menu to adapt to changing consumer dynamics.

“Our success is not going to be defined by the number of stores,” CEO Frances Allen told employees.

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