Winter storm costs Taco Cabana nearly $ 2 million

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Winter Storm Uri, which swept through Texas in February, caused nearly $ 2 million in damage and lost sales at 125 Taco Cabana restaurants.

The parent company of fast casual, Dallas-based Fiesta Restaurant Group, said Thursday that Taco Cabana’s first-quarter same-store sales were negatively impacted by Uri by about 480 basis points.

All Taco Cabana locations were back up and running at the start of March, and the company is now filing insurance claims for the damage.

The Mexican concept appears to be bouncing back, recording its second-highest Cinco de Mayo sales per unit in 10 years, Fiesta said.

For the quarter ended April 4, however, Taco Cabana’s same-store sales were down 17.1% from 2019.

The other Fiesta concept, the fast-paced and laid-back Pollo Tropical, saw same-store sales decline by 3.3% compared to 2019.

The company’s total revenues decreased 1.3% to $ 144.7 million in the first quarter, compared to the same period last year.

Fiesta is trying to tackle the historically tough job market by paying an extra $ 1 an hour to all hourly employees at both brands. The company also increased the minimum hourly wage at Pollo Tropical to $ 10.

“This extra $ 1 per hour is just right now, to help us get through this labor shortage,” CEO Richard Stockinger told analysts Thursday night.

Fiesta also added a second quarter incentive bonus for the operations management team to boost retention.

“The labor shortage has resulted in reduced hours at some sites, although the overall reduction in unit opening hours has not yet reached a significant level,” said Stockinger. “We will continue to evaluate additional retention strategies and hourly pay levels going forward to ensure we can secure the right staff at our restaurants.”

Offsite channels have been essential for both brands. During the first quarter, the company worked on improving Pollo Tropical’s drive-thru infrastructure by completing work on a WiFi signal extension project. The chain is also in the final stages of upgrading all units to a faster drive-through payment system that slashes processing speeds from 25 seconds to less than five seconds per transaction.

Similar improvements are also planned for Taco Cabana.

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