CHURCH’S CHICKEN: Holding prices steady helps to boost sales

While the economic downturn has taken a toll on the overall restaurant industry, Atlanta-based Church’s Chicken is in the midst of its fifth-straight year of sales growth at existing U.S. outlets.

So far this year, Church’s U.S. same-store sales are up 3.3 percent, said Farnaz Wallace, Church’s executive vice president and chief marketing officer.

Church’s has benefited from a core customer base of lower-income families, Wallace said. Even before the downturn, these customers were watching their money closely, she said.

“They know how to make ends meet,” Wallace said. “Their lives didn’t change as much as the middle class.”

But the Atlanta chicken chain, long known for having low-priced chicken, also is attracting customers by putting an emphasis on its food, Wallace said. Church’s launched last year its “I know what good is” marketing campaign.

“You’re spending less, but you don’t have to compromise on quality,” Wallace explained. “We also have great quality chicken.”

Church’s has taken steps to counter higher commodity costs and a slowing economy, she said. Church’s, for example, has slightly reduced the size of its biscuit and changed French fry packages from cardboard to a thinner paper sleeve.

“We asked: ‘What are the areas we could cut that would not impact the quality or customer experience?’ ” Wallace said.

Church’s also tested a 99-cent value menu this year and expects a national rollout next year, Wallace said. The value menu will include sandwiches, nuggets, a piece of dark chicken with a biscuit and some side items, she said.

“People feel good because they can choose from a variety of low-priced items,” Wallace said. “We feel good because they’re buying a ton of them, and it’s mostly incremental [to existing purchases].”

The changes, though, are an extension of Church’s strategy, not a dramatic change, Wallace said. The company feels the brand is well-positioned in the market compared to KFC and Popeyes, she said.

“We’re kind of like a no-frills, authentic chicken shop that provides high-quality, homestyle fresh food at a low price,” Wallace said. “That’s something that nobody else can deliver.”

> Owner: Arcapita

> Founded: 1952

> Stores: 1,600

> Background: George W. Church Sr., a retired chicken incubator salesman, opened his first restaurant in San Antonio. Church’s was brought to Atlanta in 1992 by then-parent company America’s Favorite Chicken Co. It was sold in 2004 to Arcapita, an Atlanta-based private equity firm.