Burrito Bar’s bold strategy pays off
How has Burrito Bar managed to stay on an upward trajectory during the Covid crisis? It turns out the 31-outlet Mexican-inspired fast food chain has been bold in the face of a slowdown.
Inside Franchise Business Executive spoke to GM Shaun Butcher about the strategy that has driven success over the past few months.
While Butcher says the seeds were sown two years ago when the business started to diversify into new channels such as takeaway and home delivery, it’s been the gutsy strategy in response to the pandemic that has really seen the chain flourish.
“We have been really aggressively going after sales,” says Butcher.
The strategy has worked. Same restaurant sales growth is currently 62 per cent up year on year and same restaurant sales have risen 117 per cent compared to 2018 levels.
“July was our best month ever and was 13 per cent up on our previous record which was June, so growth is accelerating as we come out of lockdowns in most states,” says Butcher.
“We went hard on marketing, promotions, and service channels. We did more of the marketing, ran a lot of promotions that we moved to a takeaway offer, took advantage of offers on delivery platforms; we stepped it up in the pandemic to get to the fore.”
The GM admits what seems a simple solution has been helped by other hospitality businesses following a different path in reaction to the pandemic.
“It’s only simple for us because everybody moved in a different direction, everyone else was defensive, so it was easy for us to take an aggressive position. It was fortunate for us. It gave us a clear run.
“We were finding we were the only ones marketing in the area, engaging with shopping centres, doing print. In every instance we found we were the only one stepping up marketing. We got more bang for our buck.”
The business continued to focus on local strategies and local support to provide a tailored response for franchisees, a tactic employed since 2018. This tailored marketing strategy did initially prove difficult for the marketing team used to a one-size-fits-all approach, says Butcher.
“We’ve got more efficient though. And the return on investment for franchisees was substantially greater when working to their needs rather than trying to fit them into our system,” he says. “We don’t do cookie cutter.”
It paid off when Covid shutdowns forced hospitality firms to pivot.
“In regional towns we didn’t have access to third party delivery, so we supported them to implement their own delivery service.
“In suburban shopping centres, anchored by supermarkets, we were able to provide a strategy of leveraging off those supermarket customers. Around the CBD we really pushed third party aggregators.”
So how did franchisees respond to this aggressive approach?
“Our franchisees are ecstatic although they were very fearful in the beginning and they questioned our strategy,” Butcher says.
But they were soon all on board. “They were very supportive, 100 per cent within two weeks,” he says.
And in the past month 22 out of the 31 stores have had record weeks. Even amidst the second Victorian lockdown the two Burrito Bar outlets are holding their sales quite well, the GM reports.
He maintains other factors such as leasing costs are not significant to the chain’s positive fortunes. Butcher points out the leasing strategies are unlikely to be different from any other hospitality business, although it does help the brand is not located in food courts.
Burrito Bar outlets sit in a mix of locations from suburban centres to premium shopping centres, alongside cinemas, standalone sites, and some CBD locations.
While eight further stores are lined up for opening this year the pandemic has interrupted some of these schedules.
“It’s been a challenge to open and Melbourne and New South Wales are still doubtful for now,” says Butcher.
Burrito Bar’s bold moves have driven the chain’s success and the boss is not about to retreat. Despite expecting rationalisation amid a struggling hospitality scene, he has a positive outlook for the brand.
So the next move is to launch the company’s first franchise recruitment campaign in October, after relying on referrals and multi-unit franchisees for expansion.
“We’re very optimistic,” he says.