CHURCHS CHICKEN SETTING PLANS TO OFFER GROCERY ITEMS

ROSEANNE HARPER

ATLANTA -- In a new twist on the trend of cross-breeding in food retail formats, a quick-service restaurant chain based here plans to add grocery items in some of its outlets.

The chain, Churchs Chicken, is looking to add elements of convenience-store type merchandising to its format, as a way to draw greater volume out of selected store sites, according to top executives.

The food-service operator is currently at the stage of perusing existing data base information, in an attempt to determine what its customers at particular locations might buy in addition to Churchs' conventional chicken and fixings.

"We're also considering doing some new research," said Hala Moddelmog, president of the chain, which has 900 units in the United States. The chain's parent company is America's Favorite Chicken, also based here.

"We will do a survey in order to gather quantitative data, and we might also do some focus groups," Moddelmog said.

"We're just simply looking to maximize our investment in the real estate we have. We have great chicken that brings customers in. It makes sense to see what other products or services we can offer them," she told SN.

The company will experiment with an assortment of between 20 and 200 items, from the leading merchandise categories in the convenience store industry, she said.

"Certainly, milk and juice will be offered. We're also talking about adding a check-cashing service and a fax machine," Moddelmog said.

The Churchs executive insisted that the company's goal was not to take business away from C-store operators, but rather to fill a void in its own food offerings.

"About 60% of our restaurants are in the inner city, and often there are services and products that are not readily available in those areas," she said.

"Our convenience store partners are very important to us. We won't put the items in our restaurants that are near convenience or grocery stores."

The chain has targeted two existing sites in Atlanta's inner city for testing the concept. However, the timing for the introduction of the items has not been set, Moddelmog said.

One local consultant who works with the food-service industry said he considers the idea an interesting test.

"The consumer is what it's all about," said Ira Blumenthal, president of Co-Opportunities, a business development and consulting firm here. If you can give customers something else that they want or need, they'll feel better about you. It's offering them convenience."

If Churchs or any other restaurant should add grocery items in a unit that's near a supermarket, it could strengthen its competitive position, Blumenthal said. "But if supermarkets could build the credibility of their chicken programs, they would have the advantage, since they've always been known for the choices [in grocery items] they offer. It's just that the branded chicken chains, for whatever reasons, have more credibility in the minds of consumers than cooked chicken at a supermarket," Blumenthal added. Another consultant who works with supermarkets sees Churchs' efforts as clear competition.

"We'll probably see more of this. The fast-food chains trying to move into offering more convenience. Particularly when there's minimal population growth and inflation is flat, the only way you can grow your business is to take it away from somebody else," said Howard Solganik, president of Solganik & Associates, a Dayton, Ohio-based consulting firm.

The most common "nontraditional" site for Churchs outlets is within convenience stores, but the chain is also targeting supermarkets as sites for its restaurants.

One that opened in a Columbus, Ohio, unit of Kroger Co. has been so successful that plans call for 10 more such link-ups in Ohio, a Churchs' source told SN.