Despite supply, staffing struggles, restaurant added new stores globally
02/05/2023
Despite inflation's impact on its customers, supply chain snarls and staffing struggles, Fayetteville-based Slim Chickens grew to 200 locations across the globe last year and says it is set for sustained growth in 2023.
The restaurant chain is expected to sign 200 new development deals this year, with 50 restaurant locations opening in in the United States during the year and more than 15 internationally, the company said. It expanded into 15 new franchise territories last year and now has a total of 1,100 unit development deals in the works around the world.
All that said, top executives at Slim Chickens said 2022 came with a raft of challenges -- including rising costs for key inputs, like chicken, availability of key items as supply chain issues remained uncertain and the effects of inflation on consumers.
"It was a tricky year, and not just for us -- for everybody," Tom Gordon said in a recent interview.
The company had to raise prices in some markets in 2022, he said, but it did so with care.
"We wanted to be thoughtful," he said. "We didn't want our guests to think we were too expensive."
He said over the last few months of the year, supply chain pressures seemed to ease slightly and employee hiring and retention is beginning return to more normal and manageable levels.
Sarah Lueke, teaching assistant professor with the department of management at the Sam M. Walton College of Business at the University of Arkansas, said in a recent interview that due to the covid-19 pandemic's effect on the workforce, there's been a war for talent, with employers struggling to keep enough front line workers on the job. To remain competitive, businesses have raised wages or offered benefits like sign-on bonuses, flexible time or child care to attract and keep workers, she said.
Lueke said over the last few months the landscape is starting to shift, noting a wave of layoffs in the tech sector. She said, in general, employers feel a little less pressure but noted many businesses will continue to focus their efforts on employee retention.
According to the latest National Restaurant Association Business Conditions survey, higher food costs, labor costs and utility costs are a significant challenge for the industry.
"The restaurant industry is ending the year in an environment that's the most typical since 2019," Hudson Riehle, senior vice president of Research for the National Restaurant Association, said in a release. "Moderate but positive employment growth across the economy and elevated consumer spending in restaurants will allow the restaurant industry to kick off 2023 on a more optimistic note than the last few years, but operators remain braced for potential challenges in the new year."
Slim Chickens was founded in 2003 and is privately owned. It competes in the fast-casual segment, where restaurants provide a slightly more formal dining experience compared with fast-food operations. While fast-casual restaurants don't have a wait staff, servers generally carry food to tables.
Despite the headwinds in 2022, sales were strong for the year, Sam Rothchild, chief operations officer for Slim Chickens said. The chain's average unit volume for its high volume locations in 2022, which equates roughly to revenue, was $3.8 million and Slim Chickens has seen a 44% increase in comparable stores sales growth over the last four years, according to the company.
He credited the chain's success to its workers and dedicated franchisees.
"I couldn't be more proud," Rothchild said.
During 2022 the company saw extensive expansion in the United Kingdom, with 32 stores operating there and plans to add 20 in 2023. Rothchild said the Slim Chicken's locations are popular and placed in areas with good foot traffic. Plans for 2023 also include expansion into France, Spain, Germany, Poland and Turkey.
In the United States Slim Chickens is moving into Florida, heading west into New Mexico and Montana and continuing its movement up the East Coast. It's also continuing to grow in Arkansas, adding a new location in Springdale just last week, bringing the total stores in the state to 26.
Rothchild said in 2022 the company dealt with labor shortages and inflationary pressures by focusing on the customer. He said the strategy was to grow sales through great food and services and deal with the problems as the arose.
"We just rode it out," he said.
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