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Sonic announces value menu as comps decline
December 14, 2008
OKLAHOMA CITY — Sonic Corp. plans to launch a system-wide value menu at the end of December, the company has announced. Sonic did not give any specifics about the menu but said it is in line with the company's previous announcement that the company was taking a more strategic approach to pricing. The value menu also is a reflection of the challenging economic environment for consumers and the growing frequency of consumers trading to lower-priced choices.
"Our new value menu will give customers the flexibility to snack, add sides or build a meal at a price that best meets their needs," said Clifford Hudson, Sonic's chairman and chief executive officer. "At the same time, we note that incremental growth in the quick-service restaurant segment has been driven primarily by value-based offers, and we believe that the combination of a strong value menu and our highly differentiated drive-in concept will enable us to capitalize on that opportunity."
The company also provided a financial update, which includes:
- Expectations for sales growth for the first quarter ended on Nov. 30 are down, with estimated system-wide same-store sales expected to decline by 2 percent to 3 percent.
- Sales at partner drive-ins (drive-ins in which the company owns a majority interest) continue to lag franchisee sales by approximately four percentage points.
- The company refranchised partner drive-ins in one smaller market during the first quarter and continues to have ongoing refranchising discussions with both existing and new franchisees.
Sonic officials said the company remains on track to achieve its objective of reducing the overall percentage of partner drive-ins to the 12 percent to 14 percent range over the next few years.
Sonic expects to report its first quarter results before the market opens on Jan. 8. The company will provide an online Web simulcast of its earnings release conference call that same morning beginning at 10 a.m. Eastern time. An online replay of the conference call will be available approximately two hours following the conclusion of the live broadcast and will continue through Feb. 8.
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