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Wisconsin-based Culver's made $747 million in sales last year, according to market research firm Technomic, an 8.4 percent jump over its 2010 results. The chain's comps were up 13 percent in December and in the first quarter of this year, they were up 16 percent.
Culver's has about 430 outlets around the country, mostly franchised. Co-founder/CEO Craig Culver anticipates adding about 30 more this year, including a debut in Florida.
At this week's National Restaurant Association Show in Chicago, QSRweb had the opportunity to talk with Culver about the chain's success and what challenges exist in the current marketplace.
QSRweb: How has Culver's managed to maintain so much success in an increasingly competitive better burger segment?
Craig Culver: We think we're one of the originals in that better burger segment, going back all the way to 1984. We know who we are and our fans know who we are. If you go back seven to eight years ago, a lot of people were saying the burger business was dying. It's not dying at all. And I think we're in a good place because we're a cook-to-order concept and always have been. That makes a difference to our customers.
QSRweb: To what do you attribute the 16 percent comps in the first quarter of this year?
Culver: Well we had no winter. The weather made a big difference for us. Also, our marketing department has done an outstanding job. They get who we are and culture is such a big deal in any company. I think the 'Welcome' ad campaign (launched in March 2011) has been successful. It communicates realness and it is who we are.
Also, I have to give a lot of credit to our franchisees. Our retention rates are very strong and you can't build a strong culture without that. We're pleased with where we are right now. The banks and the economy have both loosened up.
QSRweb: Culver's is undergoing a reimaging effort at its restaurants, how is that coming along?
Culver: It's coming along nicely, but we're not forcing our franchisees to spend the money to do this. They have the choice as to whether or not they want to and there has to be an ROI for them. It's really a recommendation from us. But we're seeing that our operators are buying into it and they're seeing great results.
QSRweb: How will your marketing strategy change moving forward, and how much of a role will social media play?
Culver: You're going to see similar things being done to what we've been doing, and you'll see some new things coming out. We don't put our LTOs on TV; our headliners are our core products and it works. We ran a campaign for our (North Atlantic) Cod Filet and blew the doors out on that item when we promoted it. So we'll largely stick to our current strategy.
With social media, it's an important part of our marketing piece and will continue to be, and we will continue to put more money into it. That consumer feedback is so important. It can be hurtful at times, but we definitely have our fans that come to our defense.
QSRweb: How will you approach opening 30 new units this year?
Culver: We're restricting our growth to 30 so it's not all over the place. Growing store count is important to us, but the most important thing is growing comp sales.
QSRweb: Will Culver's continue to showcase new products on its menu?
Culver: I love that whole food side of the business and I'll see something and ask Jim (Doak, director of Research and Menu Development and Executive Chef) why we're not doing that. But he's an innovator and we all trust him. We'll continue to see him work that innovation and I'll be excited about it. I'm OK with change, as long as it's rolled into marketing correctly.
QSRweb: How have you navigated the tricky commodities market?
Culver: We navigate that with a good supply chain team and good suppliers. We did go up a little, but not nearly as much as it could've been. If those commodities continue to rise, we'll have to take a look at our menu, but we're not going to change who we are.
QSRweb: Looking at the next year and beyond, what are you most looking forward to with the company?
Culver: I am looking forward to Culver's continuing to attract the right people – franchisees and partners. It's easy to put out good food, but the people aspect is where the greatest opportunity is in this business. When someone comes into our restaurants, I want them to be treated like kings and queens. A ButterBurger tastes better when someone serves it with a 'please,' a 'thank you' and a smile.
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Topics: Burger/Steak/BBQ , Business Strategy and Profitability , Equipment & Supplies , Food & Beverage , Franchising & Growth , Marketing / Branding / Promotion , Online / Mobile / Social , Operations Management , Research & Development / Innovation , Restaurant Design / Layout