Popeyes Louisiana Kitchen Inc., also known as Popeyes, is an American chain of fried chicken fast-food restaurants that was founded by Alvin C. Copeland Sr. in New Orleans in 1972. What started with one small restaurant has now swept the United States and the rest of the world with its sensational taste from the company’s 3,400 locations worldwide.
But it wasn’t a smooth sailing ride right from the beginning. Founder Copeland actually started with a donut business but decided to shift to fast-food chicken when KFC first opened its store in New Orleans. Originally, Copeland named his chicken venture “Chicken on the run” but had to close it down when it wasn’t generating enough sales and attracting customers at all. Later on, he re-opened the business along with a new recipe by adding a unique blend of spices to the mixture.
Today, Popeyes has stood its ground as a reputable and well-loved fried chicken fast-food chain, boasting $143 million revenue in the third quarter of 2021, up by 1.2% from the prior-year quarter.
To answer the question, ‘Popeyes VS KFC: Who’s winning?’, let’s take a look at Popeyes SWOT analysis and see where the brand is lacking and has helped the company gain market share over the last 24 months. I also share my ideas on what management can do to improve business performance even further.
SWOT Analysis:
Strengths
Popeyes is known for fried chicken.
Building the brand to where it is today is no easy feat. But what makes Popeyes one of the famous fried chicken fast-food chains not just in the US but in the rest of the world is the company’s consistency in offering quality products and services to its customers.
Product quality and innovation – Fast-food chains often compromise quality to ensure faster service but not Popeyes that prioritizes quality over everything else. This is evident in their meal prep process as they marinate chicken for 12 hours with a unique blend of seasonings. The same can be said with the Popeyes Chicken Sandwich that resulted in long lines and sold out inventories.
Global expansion – Popeyes knows the path to growth is through expansion. After opening stores in Brazil, Spain, and other countries in Europe and South America, Popeyes opened its flagship store in Shanghai, China, at the height of the global health crisis.
Their China debut marked their most successful grand opening yet as customers waited outside in line to get a hold of their chicken and chicken sandwich. They plan to open over 1,500 restaurants in China over the next decade.
Digital focus on the mobile app and delivery channels – To cater to the younger customers and continue the brand’s innovation, Popeyes launched its first loyalty program called Popeyes Rewards. The program aims to drive more customers by offering exclusive deals and a chance to earn and redeem points using the Popeyes app.
Since the launch of the app, the company’s digital sales accounted for 17% of the total sales in the US in the first quarter of 2021. Starting 2018, Popeyes offers delivery through Uber Eats which reported that orders for fried chicken increased by 54% over the past year.
Weaknesses
Whether you live in the East or West… Everyone loves fried chicken.
While it might feel like Popeyes is firing on all cylinders there are some exposed flanks.
Weak online presence on social media – In this day and age, having a social media presence is very important for any business. With Popeyes, they haven’t gotten the hang of it just yet. With less than a million followers on Facebook as compared to over 57 million KFC followers, we know pretty well Popeyes isn’t doing much in the digital world. The same is true with their Twitter account with just over 250,000 followers while KFC has 1.5 million of its own.
Franchises are mostly at gas stations – Considering Popeyes is not a startup company, you would expect more than having franchises that are mostly at gas stations. Not only does this mean there is less customer traffic but also the fact that there aren’t enough customers who are willing to buy and dine at proper store locations. This can also paint a negative impression of the brand given that it’s been around for years yet we are seeing that franchises don’t seem to be doing as well as they could be.
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Store locations are highly concentrated in the South – Given the restaurant chain originated in the South, analysts notice how most of Popeyes store locations are highly concentrated in the South area (Tennessee and Louisiana). The company still has a lot of work ahead of them to win over customers in the Midwest.
Bad customer service – They may have focused too much on product quality and have made a name off it, but Popeyes needs to get their act together when it comes to their customer service. Back in 2016, Popeyes finally admitted their customer service sucks. This admission came after constant complaints on social media from very dissatisfied customers.
Limited menu variety – While Popeyes’ chicken sandwich made a huge impact on customers and became the fast-food phenomenon in 2019 as it continues to do until today there have been a lot of complaints regarding the brand’s lack of other food offerings. Further menu innovation and exploration is advised for this restaurant.
Opportunities
Could deep fried chicken strips be an opportunity for this chain?
Popeyes has the potential to grow further and expand deeper into different markets.
Introduce a healthy menu options – According to the International Food Information Council’s survey, 85% of Americans have changed their diet or the way they prepare their meals during the pandemic. For a fast-food chain like Popeyes, one way they can attract more customers is by introducing a handful of healthy menu items.
Use Popeye the sailor man to enhance the brand image – Popeye the sailor man is a fictional character that made its debut in the daily King Features comic strip called Thimble Theatre on January 17, 1929, which later on also appeared in theatrical and television animated cartoons. Given Popeye’s popularity and having the same name as Popeyes Louisiana Kitchen, it would give the fast-food chain a boost in their brand image if they used Popeye the sailor man as part of their branding and marketing efforts.
Entry into the emerging Asian markets – As an American brand, it’s not always easy to expand internationally where taste preferences and eating habits can be very different. But this doesn’t mean one shouldn’t even try to make a move. After Popeyes’ successful launch in China, the company should try to further deepen its footprint and continue opening its stores in more Asian markets such as Singapore, Malaysia, Hong Kong, and the Philippines.
Threats
It’s smart for businesses to understand the threat to their business model. This helps management prepare for changes in market dynamics.
Rising cost of ingredients – If there was one consistent threat that always hit restaurants, it is the rising cost of ingredients. Restaurant owners have accepted the fact that there will always be a rise in the cost of ingredients but with the pandemic hitting hard and caused a variety of supply chain issues, even big fast-food chains like Popeyes are facing a difficult time dealing with it. The only way out is if Popeyes can either cut costs or pass those expenses onto the customer through menu price increases.
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Highly competitive industry – With over 200,000 fast-food restaurants in the US, saying that the competition in this industry is tough is an understatement. Plus the fact that Popeyes’ direct competition includes KFC, McDonald’s and Burger King – some of the country’s leading global fast-food chains. Consistency in product quality and service should remain as Popeyes’ main priority if they want to continue swimming forward and not just treading water.
Rising health conscious individuals – Obesity has long been considered a major health issue in America where 42.5% of adults aged 20 and over are suffering from obesity. This opened the eyes of many individuals who are starting to rethink the fuel they put into their bodies. As a popular fast-food chain, it would be difficult for Popeyes to keep attracting customers if a big percentage of their target audience are starting to eat healthy or are health conscious.
Popeyes VS KFC: Who is winning?
What chicken restaurant do you prefer?
Now that we’ve taken a look at Popeyes’s SWOT analysis, let’s go back to the question of who is winning between Popeyes and KFC? With both fast-food chains being two of the country’s well-loved in the industry and each having their own share of dedicated fans through the years, it might be difficult to know who exactly is winning without looking at the cold hard numbers.
In terms of the number of store locations, it’s a landslide win with KFC’s 3,984 locations in the US only, plus 5,200 stores in China versus Popeyes’ 3,400 locations worldwide. Given that KFC has more locations in the country and worldwide, one can assume that KFC would generate more revenue than Popeyes. So how much is it exactly?
It is reported that in 2020, KFC was valued at $5.4 billion while Popeyes’ revenue in the 3rd quarter of 2021 is $143 million, up 1.2% from the previous year.
Now, let’s talk about the most important thing – the food. Both Popeyes and KFC serve similar products like fried chicken, chicken tenders, fries, mashed potatoes, biscuits and more. But who has better food? Is KFC winning with their years of experience and proven secret blend of herbs? Or is Popeyes on the lead with their extra crunchy, mild and spicy chicken offerings?
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Fans say that Popeyes is winning when it comes to crunch and it leveled up even more thanks to KFC chicken’s dryness. Some people also shared that when it comes to slides, Popeyes is on the lead. But I think that when it comes to taste, it is pretty much personal preference as one would debate KFC has better food if they don’t really like the Cajun approach from Popeyes or vice versa, someone saying that Popeyes has leveled up the fried chicken approach with their extra crisp and flavor.
I think we can all agree that the debate between the best fried chicken chain will continue to rage on for the foreseeable future. One thing is for sure, Popeyes still has plenty of growth potential.
Having seven times less store locations as KFC but gaining over $100 million in revenue last year, Popeyes clearly knows what they’re doing and if they focus on improving their customer service which has been highly criticized for years. The chicken chain seems poised to make a fortune in the years, especially if they can replicate the release of their now famous chicken sandwich that took American’s taste buds by storm in 2019.
