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Tuesday
Sep102019

Arby's

Arby's strong QSR positioning is based upon a credible NY deli format that bakes beef roasts and freshly slices all other roasts in-house in order to create fast crafted, made-to-order hot deli sandwiches. Its sandwiches are distinguished by generous stacks of quality meat toppings (big, meaty sandwiches) and leading-edge protein variety which extends well beyond Arby's core roast beef heritage. This positioning is unique to the $1B+ QSR segment and contrasts with veggie-heavy foods offered by many fast-casual concepts. Arby's menu also offers a compelling alternative to burger, chicken-only and cold-cut sub concepts. Innovative LTOs drive trial and add variety while a steady layer of price point value LTOs helps competitive positioning in the current operating environment. Further, its selection of LTO gourmet Market Fresh sandwiches & salads expands the concept's appeal to more upscale, health conscious consumers (eliminating the veto vote). Marketing seems to break-through the clutter and its effective “We Have the Meats, For Sandwiches” marketing campaigns have better oriented the brand towards a younger demo. Having said all this, it is not surprising that Arby's sales, while positive, have underperformed over the last couple of years which reflects the challenge of a premium positioned QSR chain in our current operating environment dominated by discounts and value. Also, Arby's sales would probably benefit from a faster remodel and digital cadence as it continues to evolve its image beyond its core roast beef products which still drive the majority of sales. An all-day breakfast offering (bagels made from chicken meat??) probably could help as well. In conclusion, while Arby's is well positioned as a QSR player that can serve as a credible alternative to a NY deli, the brand may require the wrap-up of a few more ongoing upgrade initiatives to complete its evolution sufficient to return to comp outperformance in today's hyper-competitive world.

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