Hooters says sales are up with the return of indoor dining while delivery stays strong.- CEO Sal Melilli says the chain has loyal customers driving sales.
- Hooters is also growing fast-casual chain
Hoots and several virtual brands.
A labor shortage and rising chicken wing prices could be a disaster for Hooters, but the chain is thriving despite the odds.
Hooters is part of the wave of full-service casual restaurants seeing a resurgence this year, alongside chains like Texas Roadhouse and Longhorn Steakhouse. Hooters is seeing higher sales this year than 2020 when sales were low thanks to COVID restrictions and closed dining rooms. Foot traffic is way above 2020 levels, nearly 50% year over year during some weeks this summer, according to data from Placer.ai.
But the business doesn't just look good in comparison to the skewed levels of 2020.
"Consumers came back quickly, with customers visiting regularly again," Hooters of America CEO Sal Melilli told Insider. He said 2021 sales are up "double digits" over even 2019 numbers. Traffic is hovering around 2019 levels, surging as high as 10% above 2019 on the week of July 5, and dipping 2.2% below 2019 on the week of August 8, the most recent period for which data is available.
Part of Hooter's plan for emerging from the pandemic stronger than ever is Hoots, the fast-casual version of Hooters that sells a subset of the top-selling menu items. So far there are eight open Hoots locations across Illinois, Texas, and Georgia, with 110 development agreements for future restaurants, Melilli says. Six new Hoots locations are planned to open by the end of 2021.
"Fast-casual is growing exponentially," Mellili said.
The chain isn't afraid to adapt to changing conditions in the restaurant world. One franchisee is experimenting with a drive-thru setup, Melilli said, after drive-thrus exploded over the last year and became key for fast food. Thanks to already-established relationships with third-party delivery services, Hooters was able to easily shift to more takeout and delivery orders. In-store sales are growing, Melilli said, but off-premise sales are holding steady even while many COVID restrictions have been lifted.
Virtual brands also helped the wing chain grow in 2020 and 2021. Hootie's Burger Bar, Hootie's Bait and Tackle, and Hootie's Chicken Tenders all operate out of regular Hooters kitchens with the same staff and ingredients, reaching different customers than those who might frequent Hooters. More virtual brands are in the works, according to Nation's Restaurant News. Chicken wings, which travel well for delivery, have been a huge sit of virtual concepts over the last year, with announcements from Applebees, Wingstop, and Chick-fil-A.
Melilli says Hooters is resilient, with a deeply loyal customer base.
"In good times you go to Hooters to celebrate, in bad times you go to Hooters together." About 110,000 restaurants, 17% of all establishments in the US, closed during the pandemic, but only four Hooters restaurants closed, Melilli said.
"We'll make it through this, we survived 9/11 and the 2008 recession," he said, explaining he's confident about Hooters' future. "We're strong."
Do you work at or own a Hooters franchise? Email this reporter at mmeisenzahl@businessinsider.com.