Consumers excited about Portillo’s move into breakfast may have to wait a bit.
The fast-casual chain began testing the offer of breakfast items at five units in the Chicagoland area in April. On Tuesday, CEO Michael Osanloo said they will evaluate the test through the summer before making a decision about expanding breakfast to more stores around the company’s home base.
And they’ll probably also test it outside Chicago before they consider taking the daypart systemwide.
“Obviously, the incrementality of breakfast can be fantastic, if it works,” said Osanloo. But, he added, “There are plenty of restaurant companies out there that have tried to expand to breakfast and it hasn’t worked.”
Osanloo said, so far, Portillo’s has gotten a lot of positive feedback, but also some constructive feedback, on the breakfast offering, which includes items like a Polish sausage, egg and cheese sandwich, and the brand’s famous chocolate cake as either a doughnut or as an iced coffee flavor, for example.
The chain has also done very little marketing about the test so far because the focus has been on operational execution first, he said.
The move comes at a time when Portillo’s is hoping to drive traffic with increased marketing of the brand more broadly.
Portillo’s reported same-store sales up 1.8% for the first quarter, but that was largely a result of higher menu prices. The chain’s average check increased 4.9%, which was offset by a 3.1% decline in transactions.
Osanloo blamed bad weather in February, as well as declining consumer confidence and “on again/off again tariffs.” Sales at new units open in the fourth quarter of 2024 also were slower than expected, but Osanloo expressed confidence that the slowdown was related to local issues, like street construction near the unit in Houston, and lack of brand awareness.
In markets where Portillo’s has better brand awareness, the chain is more insulated against economic headwinds, he said.
In fact, Portillo’s is somewhat optimistic for the year ahead. The chain raised its same-store sales guidance, projecting an increase between 1% to 3%, up from earlier expectations of a flat to 2% increase.
The chain plans to increase advertising to raise brand awareness outside Chicago. And Osanloo said the brand’s new Perks loyalty program, which rolled out in March, is showing promise.
Driving enrollment in the first few weeks with the offer of free fries, the Perks program was tested with surprise-and-delight offers of either a free sandwich or burger in Chicago and Dallas. The chain saw “solid redemption,” Osanloo said, and plans to build on that momentum, bringing the offer to all Perks members in the second quarter.
Portillo’s ended the first quarter with 94 restaurants. The chain plans to open 12 this year, of which 10 will be the smaller, 6,200-square-foot Restaurant of the Future 1.0 format. Among them will also be the first in-line, walk-up restaurant, a small unit with no drive-thru, scheduled to open in Central Florida.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.