News

Popeyes cuts $16 million from supply chain costs

April 17, 2011

Popeyes Louisiana Kitchen, a division of AFC Enterprises Inc., achieved a supply chain cost savings of approximately $16 million in 2010.

The benefit to franchisees was estimated at one full percentage point improvement in restaurant operating profit margins before rent, compared with the prior year.

"At Popeyes, we are very data centric – collecting and analyzing key information, and identifying those cost-saving solutions that directly and indirectly impact each restaurant's bottom line," said Cheryl Bachelder, president and chief executive officer for Popeyes Louisiana Kitchen. "In the quick-serve restaurant business money is made in slivers of percentages and it is critically important to manage those costs."

A cross-functional group comprised of Popeyes' supply chain management and finance team, as well as Supply Management Services (SMS), a supply chain cooperative serving the Popeyes restaurant system, evaluated aspects of company and restaurant-level profitability, from packaging prices and commodity costs to vendor relationships.

The team successfully renegotiated key vendor contracts and implemented restaurant efficiency initiatives to achieve the savings.