Chick-fil-A is the largest QSR chicken brand in the United States based on annual system-wide net sales. The company has experienced strong revenue growth in 2021 compared to the previous fiscal. The QSR chicken brand enjoys strong popularity and brand loyalty in the United States. It has also continued to expand its physical footprint in the United States. Apart from company owned stores, Chick-fil-A also operates its business through franchisees, licensees and strategic partners.
Chick-fil-A is a family-owned business led by CEO Andrew T Cathy. Its founder Truett Cathy opened the first Chick-fil-A restaurant in 1967. It has its operations across 47 states in the United States, Puerto Rico and Canada. While Chick-fil-A has an impressive presence in the United States, compared to several other leading QSR brands it has expanded at a slower rate opening a limited number of new stores each year.
The QSR chicken brand is a leading competitor of KFC in the US. Outside the United States, it has operations only in Canada. The company has five franchised locations operating in Toronto, Canada, as of December 31, 2021.
Chick-fil-A’s excellent performance in 2021 was driven by several factors. Apart from great quality, customer service, and digital technology, a limited but diverse menu has helped it achieve faster growth. Marketing is also among the leading factors helping the QSR brand maintain its competitive position and find superior growth in the US market.
Chick-fil-A Marketing Mix: Four Ps
The QSR industry is marked by intense competition. Chick-fil-A faces stiff competition from several leading QSR brands including KFC, Popeyes and several other QSR brands. We will take a look at the four Ps of Chick-fil-A in this marketing mix and how they are driving higher competitiveness and better financial performance for the company.
Each of the four Ps plays a strategically important role in driving growth and competitive strength of a company. Let’s take a look at how Chick-fil-A has strengthened its position in the US market, through the lens of these four Ps.
The QSR industry is marked by strong competition. One of the core factors that drives superior growth and strong image for QSR businesses is food quality. Chick-fil-A follows strict quality standards to serve only healthy and top-quality food to its customers. Its core menu item is chicken and it serves only whole boneless breasts of chicken without any added preservatives or fillers. The company sources chicken from farms in the United States in accordance with its animal well-being standards. It sources chicken that are raised antibiotic free.
Its leadership position in the US market is driven mainly by the top-quality food and its diverse menu. The supply chain of the company also plays a crucial role in maintaining the quality of products it offers. Its focus remains on fresh ingredients and instore preparation. Chick-fil-A offers a limited but diverse menu that is great in terms of quality and promises highest satisfaction for customers.
Its main product is a boneless breast of chicken sandwich known as a Chick-fil-A Chicken Sandwich. The other products served by a Chick-fil-A restaurant include the following:
Chick-fil-A Spicy Chicken Sandwich,
Chick-fil-A Grilled Chicken Sandwich,
Chick-fil-A Chick-n-Strips Cool Wrap,
Chick-fil-A Waffle Potato Fries, salads and soft drinks, as well as hand-spun milkshakes, freshly squeezed lemonade and a variety of breakfast items, including Chick-fil-A Chicken Biscuit, Egg White Grill, Hash Brown Scramble Burrito, Chickn-Minis, and Greek Yogurt Parfait items.
The large market share of the company in the US market compared to its rivals can be credited to its food quality mainly. Chick-fil-A enjoys a 45% market share in chicken sandwiches sales.
Popeyes is the largest QSR chicken brand in the United States based on systemwide sales. However, compared to most other leading brands in the QSR sector, the company has a smaller physical footprint in the United States market.
Chick-fil-A had 2,709 restaurant stores operational by the end of 2021. The company had 2,704 restaurant stores operational in the United States market and five locations in Toronto, Canada, all of which were run by franchisees.
The company has its restaurants located at key locations including airports, malls, college campuses and other independent locations.
Chick-fil-A has also developed its own distribution capabilities to provide its restaurants with ingredients, packaging and other supplies. It has also developed a lemon juice production facility in Valencia, California for serving lemon juice to all Chick-fil-A restaurants. The facility is called Bay Center.
The company serves its customers using both physical and digital distribution channels. Its digital sales have climbed fast in the recent years and now account for a large part of its total sales and revenues. The Chick-fil-A has become very popular and a large number of customers use the app to buy Chick-fil-A products online.
The QSR industry in the US and Canada is marked by intense competition. There is strong price competition between the QSR brands. Most leading QSR brands including McDonalds, KFC, BK and others price their products competitively to maintain market share and customer loyalty.
The pricing strategy of a QSR brand has a significant impact on its sales and revenues. Chick-fil-A also follows a competitive pricing strategy to attract and retain customers. Competitive pricing combined with food quality has led to higher popularity and sales for the brand.
Marketing and promotions are critical to driving sales in the QSR industry. There are a large number of QSR brands operating in the US market. Most of these brands invest heavily in marketing and promotions. Digital promotions constitute a sizeable part of the advertising budget for most QSR brands in the United States.
Chick-fil-A also invests heavily in advertising to maintain its sales and market share. The company spent $156 million on advertising in 2021.
It mainly uses its website and app for marketing and maintaining strong customer relationships.
Apart from online and instore promotions, other common marketing tactics used by Chick-fil-A include national partnerships and sponsorships. Chick-fil-A has been the title sponsor of Chick-fil-A Peach Bowl since 1996. Its other sponsorships include College Football Hall of Fame, Chick fil A fan experience and Chick-fil-A Kickoff game. The company has also received several awards and recognitions for its performance in various areas including HR management, product quality and customer service.
Overall, it has maintained a strong brand image and also invests in the communities where it operates to maintain a strong social image.
Conclusion and suggestions:
Chick-fil-A is positioned as a leading QSR chicken brand in the United States market with highest annual systemwide sales. The company has maintained a limited but impressive presence throughout the United States. while its product quality has played a central role in driving higher sales and popularity of the brand, its pricing and promotional strategy have also helped it successfully win market share. The company is investing in innovation and has experienced rapid and impressive growth in sales through digital channels.
The QSR industry in the United States is marked by intense competition and companies invest heavily in marketing and promotions to maintain their market shares. Apart from leading QSR chicken brands like KFC and Popeyes, the company is facing stiff competition from other well known brands like McDonald’s, BK and other several smaller local brands. Food quality and customer service have remained a central focus for the QSR brands. However, customer service, brand image and innovation are now equally critical for growth.
Chick-fil-A is successfully competing with the other leading QSR brands in the United States. However, internationally, its presence is limited only to Canada. It could also successfully grow its brand in the other leading Western markets like the UK. There is one unique fact to know about Chick-fil-A. The Chick-fil-A stores are closed on Sundays to let employees rest and pray in keeping with the founder’s Christian faith. While this may not seem a bright business idea to keep the stores closed on Sundays, it has proved to be a great one according to analysts and has no negative impact on the brand’s performance.