Coronavirus No Match For Chick-Fil-A
Living by conservative values, Chick-Fil-A founder Truett Cathy sought to keep his restaurant closed on Sundays beginning with his first week in business. This allowed Cathy and his staff to take a day off and an opportunity to worship if they wished. For 50 years, Cathy used his to teach Sunday school. While Cathy provided his services at church, an economic concept known as the scarcity principle was in work for Chick-Fil-A.
The scarcity principle dictates that goods with limited supply will increase demand, meaning prices will go up. In social psychology, the scarcity principle is often deployed in marketing. By making the good or service limited and exclusive to certain conditions, more demand will result knowing some people will not be afforded an opportunity to consume the good.
In this sense, every time you drive past a Chick-Fil-A on a Sunday, you are being teased with something you cannot have. This is an effective communication mechanism that signals to customers the Chick-Fil-A product is limited. Sunday may be the best day to be closed for a fast-food restaurant that wants to utilize the scarcity principle.
A time of resting for typical week-day workers, Sunday represents the bridge between the weekend and the week-days. The weekend provides more time for minds to wonder, and if someone is going out to eat, they are likely to spend more time considering options on the weekend rather than they would on a week day.
This process benefits Chick-Fil-A two-fold. If you think of Chick-Fil-A on Saturday, you may realize that the restaurant is closed the next day, so maybe you should go today. And if you think of the chain on Sunday, you will now enter the work week, a time you may dread, with Chick-Fil-A in your head as an item that could fulfill you. It may not be Monday, but by Friday, you would probably make due on your chicken fix.
The result of the closed-Sunday policy is not related to Chick-Fil-A’s primary intentions, but has nonetheless propelled Chick-Fil-A as the annual per-unit sales leader –$4.1 million — in the fast-casual food industry. For reference, no other national fast-casual chain has ever surpassed $3 million in annual per-unit sales. As of 2019, Chick-Fil-A has done so six times.
This all happens while Chick-Fil-A operates with 14 percent less operating days than its competitors. Imagine running a marathon, and the winner finishes the 26th and final mile before you or anyone else is past mile-19. Oh, and this happens after you and everyone else were given a 20-minute head-start on the winner.
That is what it feels like for the restaurants competing with Chick-Fil-A.
Another strategy outperforming for Chick-Fil-A is its slow growth model. Up until 2008, McDonald’s had 10 times as many restaurants as Chick-Fil-A, and most of the serious competitors had more than four times as many locations. Over time, having less restaurants than competitors signaled another form of scarcity to customers.
The mystic appeal of Taco Bell and Burger King declines when you drive past three of each in 15 minutes just to get to your local Chick-Fil-A. Throw in some half-dozen Subways and you might ask yourself why is Chick-Fil-A doing it so differently.
If both Chick-Fil-A and Subway were allocated to one restaurant, each across the street from one another, it would take the one Subway 50 years to equal Chick-Fil-A’s five-year sales total.
The rigidness of Chick-Fil-A’s approach can be highlighted when crossed with trends from other establishments. From 2008 to 2018, Chipotle opened more restaurants than Chick-Fil-A had in its first 45 years of business. On the contrary, in the last 12 years, while one-in-four Kentucky Fried Chicken’s have closed, Chick-Fil-A has nearly doubled its restaurant total. KFC is not alone. Dairy Queen and Subway have also shuttered many doors over the last decade.
Because Chick-Fil-A kept growth slow early on, it moved the restaurant to build sales, while fostering a faster expansion in the company’s current life-stage. This gives Chick-Fil-A a terrific opportunity to dominate during the crisis, because it regularly posts the best sales numbers per location, and it also has significantly less locations to monitor during a time when restaurants are seeing record business declines.
Just maintaining an empty restaurant is costly.
Chick-Fil-A holds the fifth largest share of fast-casual food sales in the country, yet is barely inside the top-20 in number of locations. Even if Chick-Fil-A doubled its locations overnight, it’ would only be 10th in the country for total number of restaurants.
In Rick Warren’s TIME op-ed on Truett Cathy upon his 2014 death, Warren draws attention to one of Cathy’s books— It’s Better to Build Boys Than Mend Me. The title represents Cathy’s approach to teaching Sunday school as well as his delicacy for the next generation.
Cathy recognized the strength in developing individuals into leaders as a compounding process over time. Similar to Chick-Fil-A’s model, slow-growth for the youth over the years can lead to the most qualitative results. As Cathy displayed, a bottom-up approach can pay-out big dividends in the end.
Unlike the restaurants closing their doors or limiting hours, Chick-Fil-A has continued to open new locations, having them operate drive-thru only. Some locations use a revamped drive-thru system that includes additional staff to speed up service. Multiple workers approach driver side-windows with a gadget that promptly sends the order to the kitchen. In tandem, Chick-Fil-A offers its own delivery and catering service in some markets, a system the chain has been testing since 2018.
Chick-Fil-A is built to last, and a pandemic is no threat.
Chick-Fil-A has also implemented artificial intelligence to monitor social media to help identify potential outbreaks of food-borne illness, a sign that the company cares deeply about maintaining the safety of its customers for the good of the business.
The less-is-more approach in supply along with a priority for top-notch customer-service has slotted Chick-Fil-A in a position to rival McDonald’s for the next 20 years. Soon though, Chick-Fil-A will come to a fork in the road, and in one way they are already there.
Like the restaurant chains of the past, Chick-Fil-A can drive its focus to opening thousands of more restaurants over the next few years. Or the chain can stay true to its values and continue to grow at a constant rate to keep average unit sales high. One thing is for certain though.
You will never eat inside a Chick-Fil-A on a Sunday. Thank you for reading — it’s my pleasure.
*Any statistics not linked have been calculated by the author from the QSR 50: 2008–2018 Report.
