Reviewing expenses systematically is helping Raleigh-based restaurant operator Golden Corral grow profitably despite inflation pressures, says CEO Lance Trenary.
The company expects $1.6 billion in system-wide sales in 2024, versus slightly less than $1.5 billion in 2023, the executive adds. Golden Corral, which is known for its abundant buffets, had a 7% increase in customers last year and is seeing continued gains this year.
“A lot of [the increase] is because we focused hard on our value proposition,” says Trenary, who has been the chain’s CEO since 2015. “We didn’t take the price hikes that many others in family dining took.”
Instead, the company reviewed its expenses. It hired a consultant to conduct a time and motion study in its restaurants, reviewing everything from the steps it takes to make food to its recipes. The result, says Trenary, has been about $1,000 a week in savings in labor costs, without cutting staff.
He declines to provide financial specifics, but says that average restaurant sales have reached “record highs” and “franchisees are more profitable.” Ninety-eight percent of the company’s nearly 400 restaurants are operated by franchisees.
Golden Corral is also devoted more of its marketing expenses to digital and social media. After historically spending 95% of its marketing expenses on television and radio spots, that’s down to 70%. The balance is for digital and social media.
It’s also doing a better job of targeting its advertising, says Trenary. Last year, it filmed Spanish-language commercials that aired on Latino-oriented channels. The result: The bulk of the 30% of its new customers last year were Hispanic, “and they became promoters of the brand.”
Golden Corral is also looking at more cost-efficient purchases with its food suppliers. It recently partnered with a seafood provider on a shrimp deal that led to higher sales during a promotion, says Trenary.
Founder James Maynard started the company in Fayetteville in 1973 and it now operates in 38 states. Maynard’s Investors Management Corp. retains ownership as part of a multi-industry conglomerate.
Trenary sees the opportunity to add 200 locations, including going beyond the U.S. Golden Corral has received interest from potential franchisees in Canada, Mexico, the Middle East and the Philippines.
The company recently opened a 3,500-square-foot Homeward Kitchen prototype in Southern Pines in Moore County. It takes a fast-casual approach and offers take-out options. Golden Corral is also examining a mid-size restaurant prototype that would be 6,000 to 7,000 square feet; current locations range between 10,000 square feet and 12,000 square feet.