With falling sales and traffic, Fiesta Restaurant Group—the parent company of fast-casual brands Pollo Tropical and Taco Cabana—is looking to catering to bring in revenue.
Pollo Tropical has opened a virtual kitchen in the Miami area to support its catering efforts, Fiesta’s President and CEO Rich Stockinger said in a call with analysts this week.
Same-store sales fell 2.6% at Pollo Tropical and 0.5% at Taco Cabana for the quarter ended March 31. Total revenues fell 2.1% year over year to $165.9 million.
The decline at Pollo Tropical included a 5.5% drop in traffic, a 2.9% increase in average check and a 3.5% increase in pricing.
At Taco Cabana, traffic dropped 4.1%, while prices increased 3%.
Executives blamed the declines on bad weather and unit closures. The company shuttered 23 locations late last year.
At Pollo Tropical, the chain is working to rebrand its catering program, Stockinger said.
“We have found that some of our B2C customers perceived the term ‘catering’ as expensive. … To overcome this perception, we’ll be testing alternative promotional positioning, such as emphasizing party planners of various sizes for informal, family or social gatherings,” he said.
At Taco Cabana, alcohol offerings are being expanded to include rum, tequila, wine and beer, because alcohol sales are “one of the main restaurant-level margin drivers” there, he said.