By Jennifer Williams
Chicken is having a moment, and it's often served fried. One longtime poultry chain is bending to the battered and breaded craze but plans to largely keep its focus on its longtime marinated and flame-grilled recipe.
For the first time in nearly a decade, El Pollo Loco next year is adding crispy chicken to its menu, which includes grilled chicken tacos, burritos and more, in the hopes of luring more diners. The return of fried poultry tenders comes as El Pollo Loco's sales and traffic have been challenged in recent quarters, with budget-conscious consumers watching their spending and Hispanic consumers, a key demographic for the California-based chain, pulling back generally in response to immigration crackdowns.
Despite the battered fare, El Pollo Loco is keeping its emphasis on its core menu of flame-grilled chicken to keep drawing its loyal customers.
"There's a lot of competition," said the company's finance chief, Ira Fils. El Pollo Loco has plans to respond to the chicken frenzy, for instance with grilled chicken sandwiches along with the tenders, he said. "But we're going to do it our way."
El Pollo Loco is 18 months into a three-year turnaround plan aimed at rejuvenating its brand by refreshing restaurants, beefing up its menu with new salads and wraps, and rolling out targeted deals such as Taco Tuesday. What hasn't changed is the menu's selection of mostly fire-grilled chicken items such as tostadas and salads, options that appeal to diners looking for healthier food and set El Pollo Loco apart from the packed fried-chicken market, analysts said.
The efforts are starting to show. The chicken chain's revenue for the three months ended June 25, at nearly $126 million, was up 3% compared with a year earlier. While comparable-store sales across franchises and company-owned restaurants were down 0.3%, traffic grew 0.8%, the first time the chain reported that overall traffic was up in three years.
The traffic growth comes as many food chains struggle to attract diners. Foot traffic to quick service traditional fast-food restaurants in the U.S. fell 2.4% this year through Aug. 31 compared with the same period last year, according to data from market-research firm Black Box Intelligence. Traffic to fast-casual outlets fell 1.3%.
Holding on to traffic growth while improving sales at El Pollo Loco's restaurants means staying competitive in an increasingly crowded chicken space, analysts said. Last year, chicken was the highest growth menu category across fast-casual and fast-food chains, making it the second-largest category behind burgers, said Jefferies Managing Director Andy Barish, citing data from market-research firm Technomic.
Restaurant chains want in on the rise in popularity. Wendy's is launching new chicken tenders later this year. McDonald's rolled out its own in May and two months later brought chicken Snack Wraps back to its menu. Taco Bell, meanwhile, unveiled crispy chicken nuggets, tacos and burritos this year.
El Pollo Loco's plan to appeal to diners includes new menu items, with chicken tenders and chicken sandwiches set for launch next year. Of the two, the tenders will be fried.
The changes at El Pollo Loco, which in the past has dabbled with lightly breaded and beef options, come as consumers are managing their budgets carefully, and food chains are responding with deals. Up against everyday offerings like McDonald's $8 combo-meal specials and Domino's Pizza's $9.99 for certain pizzas with up to seven toppings, El Pollo Loco is taking a different approach with targeted deals on certain days or for select new menu items. These include two tacos for $5 every Tuesday and a quesadilla meal deal for $9.99.
A more selective approach hits on consumers' appetite for value while also protecting margins, Fils said. Discounting the whole menu creates the risk that customers exclusively buy the lower-priced fare, he said. Whereas a deal on Tuesday or for certain menu items "helps drive traffic and you're not trading down your whole broad [customer] base." The taco bargain is driving traffic without eating into customer visits from other days, the CFO said, declining to share specifics on traffic or sales driven specifically by its value offerings.
The plan makes sense to boost traffic and sales without joining the race to the bottom on all prices, analysts said. But it's a challenge with where consumers are, said Todd Brooks, a restaurants and packaged foods analyst at Benchmark, a StoneX company. "You don't necessarily have that confidence that the value is always available," he said. "The risk is, what if I was craving a taco on Thursday? Loco is not even in the consideration set. You may lose that visit."
Being more competitive also means expanding outside of California, where roughly 80% of El Pollo Loco's nearly 500 restaurants are located, analysts said. This may help blunt the impact of localized events -- like the wildfires that earlier this year devastated large swaths of Los Angeles -- while also helping to broaden the consumer base.
The company's customers in the Los Angeles area, where around 70% of El Pollo Loco's revenue came from last year, tend to lean heavily Hispanic, company executives have said. President Trump's immigration crackdown has caused those shoppers to pull back their spending on everything from beverages to consumer goods and dining out. Restaurant executives at a recent Benchmark conference said the immigration crackdown is increasingly affecting certain consumers' willingness to go out and spend.
El Pollo Loco plans to open at least 10 restaurants this year, with most new locations outside of California, in states including Texas, Arizona, New Mexico and Colorado.
Write to Jennifer Williams at jennifer.williams@wsj.com
(END) Dow Jones Newswires
September 16, 2025 06:00 ET (10:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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