01/04/2013 05:16 pm ET Updated Dec 06, 2017

Sonic Drive-In Pushes Drive-Thrus

Sonic Drive-In is urging its franchisees to use a new restaurant building design that downplays its signature carhops in favor of the drive-thru windows seen at almost every other quick-service chain.

The reason? Money, of course. The new prototype reduces costs by 15 to 20 percent. Sonic President W. Scott McLain says the Oklahoma City-based chain expects the lower-cost option "will become the primary layout for new stores in the future." A half-dozen of the new-design units--based on the building size that Sonic used 15 or 20 years ago--already have opened. "What we've basically done is reduce the amount of canopy space, the number of stalls, and put a little more emphasis on the drive-thru," McLain told analysts during Sonic's first-quarter earnings call this week.


For Q1 of its current 2013 fiscal year, Sonic reported a three percent increase in same-store sales (+4.2 percent at company stores). For full-year 2013, the chain expects positive, low-single-digit improvement in comparative sales.

In another strategic shift, Sonic will put 67 percent of media dollars into national cable TV, up from 48 percent, while local TV spending drops to 26 percent from 35 percent. Chairman-CEO J. Clifford Hudson said the shift will "have an impact of increasing the number of times that the average viewer -- average consumer and our potential customer -- in every U.S. market will see our commercials. We expect this change in increased gross rating points for all of our markets to drive increased traffic in all markets." Sonic spent approximately $140 million on media in 2012. Goodby, Silverstein & Partners handles creative; Publicis Groupe's Zenith unit handles media.

The products that advertising promotes will continue to reflect Sonic's "layered daypart promotional strategy." That means advertising items for breakfast, lunch/dinner, snacks, drinks and dessert/ice cream dayparts. Sonic currently is promoting the lunch/dinner segment with the new Ultimate Grilled Cheese Sandwich line introduced this week. The Philly Steak, Cheddar Bacon Ranch and BLT sandwiches, plus two new Breakfast Toaster varieties, are all served on thick Texas Toast. Beverage advertising will promote the "398,929" drink combinations possible and that more than 20,000 of them have fewer than 60 calories, Hudson said.

The Premium Chicken line of sandwiches on ciabatta introduced in November is a permanent menu addition. CFO Stephan Vaughan said that "we underindex in chicken overall, so we do see this as quite an opportunity for us. Chicken is about six percent of our product mix versus burgers being at 18 percent. So we do see an opportunity here and feel very good about the results from that promotion."

TV spots will continue to feature the "Two Guys" characters (improv actors T.J. Jagodowski and Peter Grosz) who were brought back from exile last spring.

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