CINCINNATI -- Kroger Co. here has replaced two of its own cafes in Atlanta division stores with locally known, branded fried chicken restaurants.
Already in a deal with Chick-Fil-A, Atlanta, in which that chain anchors food courts in a handful of Atlanta-area units, Kroger more recently teamed up with Atlanta-based America's Favorite Chicken Co., the parent of Churchs Chicken and Popeyes Chicken & Biscuits. Both are well-known chains in the South.
A Popeyes was installed in one Kroger unit and a Churchs in another since the first of the year. And that's just the beginning, said Joe Genovese, executive vice president of business development for AFC.
"In the next few months, we'll be in two additional Kroger locations in Atlanta and in 20 to 30 Kroger stores by summer. Some of those will be in other Kroger divisions. Our brands happen to be popular in most of the areas where Kroger has stores, and Kroger is committed to putting restaurants in their supermarkets," Genovese added.
He said his company is also talking to two other large supermarket chains about installing Churchs or Popeyes.
Neither officials at Kroger's Atlanta division office nor at the corporate office here could be reached for comment. Initial sales of the Popeyes and Churchs restaurants in the two Kroger stores have been strong. "They're bringing in $15,000 a week in sales and the average for our units is $9,000," Genovese said. Three-quarters of sales are take-out and the average check at Churchs' is $4.50; it is $5.50 at Popeyes, he added.
AFC operates the programs in the Kroger units, and its contract involves sharing a percentage of sales. The setting up, installation of equipment and staffing are done by AFC.
"We'll also be very active with advertising with Kroger and with in-store couponing," Genovese said.
He said the restaurants offer a full menu featuring chicken in a variety of forms and several side dishes, including newly developed spicy mixed greens. "Our presence in the store makes sense, particularly because we offer items that are appropriate for evening meal replacement," Genovese said, adding that he sees that as particularly important as consumers have less and less time. "Restaurants that are completely lunch-oriented are going to have to change what they're doing," he said.
In the two Kroger units, AFC's chicken restaurants are up front and have their own entrances as well as access from inside the store. Popeyes in the one store and Churchs in the other are the only brands and the only hot, prepared food offered. Seating for about 40 is available off to the side, but the area occupied by the kitchen and prep area -- 600 to 700 square feet -- is relatively small, Genovese said.
Genovese said his company is willing to be in the company of other branded food concepts, as long as it's not another chicken program. "I could see a pizza station or Mexican potentially bundled with our restaurants," he said.
Asked to comment on Chick-Fil-A being in other Kroger units in Atlanta, Genovese said, "There's room for all of us. Those wouldn't be competition for us."
Churchs' and Popeyes' menus differ somewhat in that San Antonio-based Churchs' items have more of a Southern or Southwest seasoning and Popeyes, based in New Orleans, reflects a decided Cajun influence, Genovese said. One food consultant said she felt having one brand, with a fixed menu, could be limiting.
"It's important to be able to vary the menu. Especially if people are picking up something to take home for dinner," said Marcia Schurer, president of Culinary Connections, Boulder, Colo.
"The brand would have to be a fantastic draw into the store, and that would depend on the particular area," she added.
On that subject, Genovese said that AFC's lack of market saturation helps make the supermarket partnership particularly appealing. "Other restaurant chains that have a unit on every corner couldn't do this, but we can. It's a place for us to grow. The traffic is good. We're extremely happy with sales in these first two months."