After years of restaurant closings, which saw Piccadilly Cafeteria dwindle from 270 restaurants in 1998 to 41 today, things are turning around for the Baton Rouge-based chain, thanks to a new emphasis on carryout orders.
Piccadilly opened its first To Go restaurant near Memphis, Tennessee, in July, a scaled-down carryout only location that sells the chain’s most popular dishes. The second location, on Lee Drive near Highland, opened at the end of 2018. Plans are in the works to open nine more To Go restaurants in the near future. Azam Malik, chief executive officer, said the company is eyeing three sites in metro Baton Rouge as potential locations for To Go restaurants.
“We are driving 20-plus percent of our revenues out of the takeout business,” said Malik, sitting back one afternoon at the Piccadilly on Sherwood Forest, not far from the company headquarters. The chain, which got its start in downtown Baton Rouge, is marking its 75th anniversary this month.
Takeout service had always been one of the staples of Piccadilly’s business, going back at least 50 years, when the company sold whole turkeys and sides for families to serve at Thanksgiving. Most locations have carryout areas, which help customers get in and out quicker.
“The trend for the consumer right now is all about convenience,” Malik said. “The Piccadilly brand itself goes back in history. The guest walks through, looks at the food, selects what they want and then they take the food home.”
To keep up with the trend toward convenience, Piccadilly has promoted takeout service, building an online ordering platform, improving delivery systems and building To Go restaurants. Three or four times a week, Malik said he orders takeout meals from Piccadilly and gets them delivered to his office on Sherwood Forest Boulevard. “I want to make sure the food travels right, tastes right and is packaged right,” he said.
That approach appears to be paying off. While privately held Piccadilly won’t disclose sales data, Malik said the company has seen same-store sales increase for the past three years. He’s expecting it will happen for a fourth year. Same-store sales measure comparisons of stores open at least a year.
D&B Hoovers, which tracks private companies, estimates Piccadilly’s revenue at nearly $241 million.
Malik served as Piccadilly’s president and chief executive officer in the early 2000s. He came back to the company in 2014, when Falcon Holdings took over control of the restaurant chain.
Piccadilly was founded by T.H. Hamilton in 1944 when the budding restaurateur acquired Piccadilly Cafeteria and Coffee Shop that had operated in downtown Baton Rouge since 1932. The business incorporated in Louisiana as Piccadilly Cafeterias Inc. in 1965 and by 1971 had hit its original growth target of 40 restaurants.
Piccadilly made a number of missteps in the 1990s and 2000s. The company bought Morrison Restaurants Inc. in 1998 for $46 million, a move that doubled the size of the business to 270 locations. But Piccadilly had to quickly dump poorly performing locations. When it filed for Chapter 11 bankruptcy reorganization in 2003, it was down to 175 locations. Piccadilly again had to file for bankruptcy in 2012; by then it was down to 82 locations.
It now has 41 locations. It has five in Baton Rouge, two each in Lafayette and Shreveport and one each in Gonzales, Covington, Gretna, Metairie, Monroe and Alexandria. It also has eight in Georgia, four in Mississippi and two each in Alabama, Florida and Virginia.
Malik said the key for Piccadilly improving its financial standing was going back to basics: serving quality food, taking care of guests and having great employees on the payroll. “That will not put the company in any jeopardy or trouble,” he said.
The restaurants are the main part of Piccadilly’s business. The company has a food service division, which provides daily meals to 80 different schools, offices and retirement communities. That accounts for 10 percent of the company’s revenue. The company also has an emergency services division, which handles feeding disaster victims and disaster responders. Malik said Piccadilly is the official contractor with the states of Louisiana and Georgia for these services.
Piccadilly also pulled out of weak markets and now plans to go back into its big markets with new restaurants. Those cities have been identified as Baton Rouge; Atlanta; Memphis, Tennessee; and Jackson, Mississippi.
A Piccadilly is under construction at the Juban Crossing development near Denham Springs, the first new full-sized restaurant the chain has opened in about 20 years, Malik said.
“This is a new design with totally new conveniences,” he said. It will feature a new takeout area, and a new menu, featuring dishes such as chicken with mango habanero salsa, baked fish, Nashville hot chicken and barbecued rib tips alongside traditional favorite meals such as fried fish and roast beef.
Malik said the Juban Crossing location will kick off a huge growth plan for Piccadilly. The goal is to double the number of restaurants and the revenue over the next three years by paying attention to the key markets and returning to some markets Piccadilly abandoned, such as Lake Charles.
“It’s just an exciting time for Piccadilly, especially for 2019 and onward,” he said.
Aaron Allen, a restaurant consultant who has worked with brands such as Red Robin, TGI Fridays and Starwood Resorts, said times have been difficult for cafeteria chains such as Piccadilly. The customer base is aging and younger generations eat in very different ways than picking out dishes on a serving line.
While delivery services such as Uber Eats and Waitr have been a short-term shot in the arm for brands, Allen said there are long-term challenges. “When it starts to happen and you have more and more restaurants offering delivery online, then it settles back to the original level of competitiveness,” he said. “They have to deeply spend capital to reinvent themselves and remain relevant.”
But Malik said he’s optimistic about the future for Piccadilly. “We offer comfort food, homestyle food, that people feel like was made at home,” he said. “We have loyal guests who eat here three, four or five times a week. And because of the size of the menu, they can get a different dish every time.”