EL Pollo Loco CEO on Low Gas Prices and Keeping Its Workers

Compared to the early part of the 1900s, Americans these days are enjoying chicken – consuming them as much as four times more.

In fact, the United States population has eaten more poultry products than beef meat for the first time since the year 1915, this according to data from a research done by USDA.

This trend is clearly one that will continue in the next coming years, and it is truly great news for the suppliers and retailers of chicken.

Steve Sather, Chief Operating Officer of El Pollo Loco, is witness to such trends having a positive effect to the customers of his restaurants in California, the State where most of the chain’s 416 branches are found, all 359 of them.

A Mexican-based Chicken restaurant chain, El Pollo Loco is considered as both a casual restaurant, much like Panera and Chipotle, and a regular fast food establishment in terms of food item prices.

On the average, a customer spends around $6 on a Loco meal during a visit. Locations of restaurants are mostly found in the southwest. Just July of last year, the chain went public, with the stocks going up by 30% in 2015 so far.

ElPolloLoco  (1)Sather deduced that as prices of gas become lower, this allows more money to go into the pocket of consumers. There is clearly some economic progress happening in the form of increased purchasing power.

At the same time, according to Sather, consumers have yet to display cautiousness in their buying activities.

It has also been forecasted that gasoline will be priced at an average of about $2.45 per gallon from the month of April up to September.

This has been the lowest price since 2009, and about a third lower than that of the same period in 2014. It was $3.59 per gallon of gas during last year’s summer season.

But all this might change.

For one thing, El Pollo Loco is beginning to feel the pinch of higher chicken prices. And it is predicted that the prices could still go up much further with the drought that’s happening in California.

Sather said that El Pollo Loco has yet to be effected by the California drought. If it does happen, it can mean a bit higher El Pollo Loco prices for its customers. Of course, the company is hoping otherwise.

Not only is it the issue of food ingredient costs that is somewhat affecting menu prices of fast food chains, including El Pollo Loco.

Some of the major retailing chains in the country, such as TJ Maxx, Target, and Wal-Mart, have already announced a raise in the wages of their lowest paid workers.

A number of restaurant establishments are also considering to make such move in order to stay competitive.

McDonald’s already made announcements of its plan to raise the salary for its hourly workers.

And just this week, Patrick Doyle, CEO of Domino’s had told CNBC that the labor market is starting to tighten and companies need to respond correctly by giving in to market demands in order to hire the best people for the business.

In the case of El Pollo Loco, Sather announced that there will be no current movement in the wages of it workers, particularly the lowest paid ones.

He explained that many of his workers already received an increase last summer, the same time when the minimum wage at California went up to $9 an hour.

Incidentally, minimum wage will be raised again in the State to $10 per hour come January 1, 2016.

According to Sather, the company is fortunate to have a satisfied workforce.

El Pollo Loco is proud to be manned by employees who have been with the chain for many, many years.
Sather added that a number of workers had started on a part-time status and went on to become store managers.

He is sure that he will not see any drastic turnout for a long time.

As part of its development, El Pollo Loco is starting to move to the east, establishing a good number of new sites within the Texas area.

But then, it might finally decide to raise salary across the board if its competitors in the restaurant industry will do so.

Still, more than higher wages, Sather insists that good working environment and conditions are the key to keeping and taking care of workers.

Wages are certainly important, that is, if a business wants to stay competitive.

But Sather reasons that working environment, above all, is the most important. If a company creates a healthy, fun, and conducive working environment for its workers, they will want to stay permanently.

Sather boasts that in El Pollo Loco, it is not only money that matters. Many other factors make their employees want to stay, such as their good relationship with supervisors, the recognition for hard work, and many chances for advancement.

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