Touting Philly Steaks, Charley’s Posts Record Year

New signs, brighter decor help CHARLEY’S post record year, impressive same-store sales growthcharleys

By JD Malone
http://www.dispatch.com/content/stories/business/2015/03/13/touting-philly-steaks-charleys-posts-record-year.html
(c) 2015 Columbus Dispatch. All Rights Reserved.

In the bustling world of mall food courts and retail strip centers, if you’re slinging sandwiches, you need to stand out.

On a recent afternoon at the Mall at Tuttle Crossing, Charley’s Philly Steaks’ new location had the most striking signs and the longest lines.

Last year, the Columbus chain adopted a new look, with red as its dominant color and giant, high-definition photos of baskets of french fries and sweating cups of lemonade floating on a background of gleaming white subway tile.

The crowd at Tuttle was no aberration.

Last year was the best ever for the Columbus-based, 540-unit chain. Same-store sales, a key figure, jumped 10 percent from 2013, said Kris Miotke, vice president of marketing at Charley’s. The company added 40 locations — including at Tuttle and Polaris Fashion Place — and plans to add 40 to 50 this year.

“(The new look) made a big difference,” said franchisee Sally Saad, who has 29 stores across the Midwest. “Before, folks didn’t really understand who we are. Now, they do.”

Part of the rebranding was recognition that Charley’s former tagline, “Grilled Subs,” didn’t grab consumers. So the chain went back to its origins, touting “Philly Steaks” in big capital letters.

The change boosted business in two ways: overall sales and items ordered, with steak edging even with chicken.

“We are selling more steaks than ever,” Saad said. “It is insane what that signage is doing.”

The sandwich segment of the restaurant industry is hot, and Charley’s new look helps capture customers, said Darren Tristano, executive vice president of Technomic in Chicago.

Charley’s can’t beat sandwich-chain giant Subway on price, but Charley’s wins with higher quality items in a market that is rewarding brands for quality, Tristano said.

It doesn’t hurt that the American economy has been humming along, and malls, where most Charley’s stores are located, have picked up as retail rebounds and hiring increases.

“All of the economic indicators are trending positively,” Tristano said. “The low cost of gas is putting a lot of money into the pockets of lower- and middle-income people, and they are spending it. So why not go to the mall?

“Not everyone shops on the Internet.”

The company doesn’t have a geographic focus for expansion or targeted markets, Miotke said. Charley’s is on five continents and opened a pair of stores in Russia last year. One of the company’s biggest markets is U.S. military bases, where there are about 100 restaurants.

One spot Charley’s doesn’t plan to go into, though, is the home of its sandwich: Philadelphia.

Step outside the City of Brotherly Love, and Charley’s is the top Philly-steak brand. Connecting to an iconic regional food helps the brand attract attention in a food-court arena. Differentiation works these days, Tristano said.

“Letting consumers know what to expect is a good idea,” he said.

Jim Novak has been through three store designs with Charley’s at his four locations in Arizona. When he bought his first franchise in 1999, the chain’s look was a white-and-green pattern and it was called a “steakery.”

Then Charley’s rolled out the earth-toned era of grilled subs that is giving way to the splash of red.

Novak said his entire year-over-year sales lift of 18 percent last year occurred after his stores were remodeled in October.

“It is eye-appealing,” he said. “We need to be noticed.”

The change also ends an identity crisis. Novak used to field a lot of questions about the nature of grilled subs. He no longer needs to explain the food.

“We don’t have to convince people that Philly steak is good,” Miotke said.

A cheesesteak needs no introduction.

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