Staying true to its customer loyalty strategies, Sonic has seen its same-store sales continue to rise in recent years.
During the company’s second-quarter earnings conference call, Sonic CEO Clifford Hudson talked about that point.
“The key initiatives that we have in place continue to fuel that multi-layer growth strategy and utilizing a number of elements, including advertising creative product news to drive the business across product categories in day parts, and we think this is one of many things as a unique advantage of ours versus our peers,” Hudson said, according to Seeking Alpha. “And despite this heightened discounting, we’ve really worked to stay focused on our more long-term promotional strategy, introducing higher quality premium priced products on the one end, while also communicating targeted value with product and day part messaging unique to our brand.”
From Sonic’s point of view, Hudson said: “We really stuck to our message of differentiation while at the same time stepping up some sporadic value offerings, but even when we do the value offerings, we work to make sure it’s consistent with the strategy we’ve taken over the years and rely on the strength of our product pipeline. So with the strength of that product pipeline and our sporadic value messaging of differentiated products, in our view, this has enabled us to post very healthy comps without entering to the sheer of our peer promotional play that a lot of our competitors are utilizing.”
In the second quarter, Sonic boasted a solid 6.5% rise in same-store sales.
“The great news about this is it comes on top of 11.5% same-store sales in the last year second quarter,” Hudson said. “So it reflects well on our concerned efforts to drive higher sales in the winter months. Our strong quarterly and annual results for the past several years have stemmed from our execution against this multi-layer growth strategy combined with same store sales growth, operating leverage in our company stores, new store development, our ascending royalty rate, and then, finally, the use of free cash flow generated by those other aspects of our business.”
Sonic’s recent growth in the chicken business, along with a stronger performance in burgers and other food items, has disproportionally driven comp store sales in the winter quarter, Hudson noted.