GOLDEN, Colo. -- Under pressure to reverse the side effects of an aggressive move into the lunch business, Boston Chicken here has shuffled its upper management and promised to redirect the company to home-meal replacement.
The shuffle includes the resignation of Laurence Zwain, Boston Market division president and chief executive officer. Parent company Boston Chicken co-chairman and CEO Scott Beck has assumed management of Boston Market, and Saad Nadhir has been renamed co-chairman of the Boston Chicken board to focus on Boston Market's takeout business. Last winter Nadhir left Boston Market to become head of Progressive Food Concepts here, the venture formed when Boston Chicken invested $23 million with Harry's Farmers Market, Rosewell, Ga., to develop its Harry's in a Hurry concept, specifically the company's ready-to-heat meals .
Dissatisfaction had brewed over Boston Market's sales momentum and the amount of discounts and promotions used to market the company, especially the Boston Carver sandwich line, over the past 18 months. Boston Chicken stock neared a two-year low May 29, but rebounded to $18, up $1.25, May 30, the day after the announced shake-up. The stock is still well below the Dec. 1, 1996, 52-week high of $41.50.
"In the last year or so, we have drifted away from our core brand attributes as we aggressively built our lunch business," Beck said. "While we are very happy with our Boston Carver sandwich line and how it has substantially driven lunch sales, byproducts of this success are the high level of promotion and discounting necessary to compete at lunch."
The lunch discounting was seen as a major factor in the slowing of dinner sales, with consumers buying the sandwiches for dinner, Beck said.
"As a result of these factors, we are going to refocus the brand on what made Boston Market so successful in the first place, serving the home-meal replacement market with great food and great service supported by marketing programs that emphasize quality, convenience and value at dinner. Dinner will be the centerpiece, with lunch as a sideline as opposed to lunch as the centerpiece, with dinner as a sideline," Beck said.
The company said Nadhir will focus on expanding Boston Market's share of the HMR business, including the test of fresh, chilled ready-to-heat meals in Boston Market stores. The chilled meals tests are expected to be under way during the third quarter of this year.