Popeyes Executive Summary
The iconic “Love that Chicken from Popeyes” tagline emphasizes the emotional bond of loyal customers with a unique brand positioning around a flavorful Louisiana heritage (slow cooking, served fast) that extends beyond fried bone-in chicken to boneless and seafood (particularly shrimp). Its core bone-in chicken is infused with a Louisiana-inspired seasoning dry rub that is applied to fresh chicken which marinates for 12 – 72 hours and is then hand-breaded. Sales strength over the last couple of years reflects resounding social media marketing success around its chicken sandwich which attracted new customers who also tend to shop from the entire menu. Also, an abundance of value deals is effective at drawing-in new and repeat customers who come-in for the promotion but may trade-up. Resultantly, its check benefits from a high mix of large family bundles. Further, the system’s digital mix doubled y/y to 17% during 1Q21 after increasing 3x y/y during 2020 and digital additionally benefits from its recently launched loyalty program which is designed to drive frequency & checks with targeted offers & campaigns. The huge success of its chicken sandwich and the chain’s strong post-lockdown positioning which benefits from a drive-thru access model & family comfort food bundle deals which travel well has helped drive domestic segment share growth to 34.5%, narrowing the gap with KFC’s 35.5% share. The system’s corresponding all-time high AUV & EBITDAR outperforms significantly and acts as a strong driver of development. All-the-same, Popeyes faces stiff and increasing chicken sandwich competition among almost all its peers in a fierce war that is also driving-up the input price of chicken. In conclusion, while Popeyes’ eye-popping success with its chicken sandwich has helped the brand to drive its store-level profitability to an all-time high, intense competition around all things chicken poses a current challenge to the leader of the pack.