Canada’s second-largest hamburger chain celebrated a milestone last month, opening its 800th location in Montreal
North Vancouver-based A&W Food Services of Canada Inc. has undergone a rapid expansion and doesn’t plan on stopping anytime soon. A&W, second in size only to McDonald’s, has opened 34 restaurants in Canada to date this year and plans to open 40 restaurants a year. BCBusiness spoke with president and CEO Paul Hollands about the chain’s rapid expansion and success in reinventing itself.
What does this milestone mean for A&W?
Well, it’s an important one in our strategic mission of really being a powerhouse brand from coast to coast. The key piece of our strategy is that we really make sure that we are convenient to Canadians everywhere and in particular that we are rounding up our pace of the restaurant openings. So 800 restaurants is a very important milestone toward that strategic target of being really highly convenient to every Canadian.
How has A&W grown over the last few years?
In terms of restaurant growth, we have committed ourselves to basically doubling our rate of growth. We started that work about four or five years ago, and we were opening 20 or so restaurants a year. Now we are moving towards our strategic target of close to 40 restaurants a year. Last year we opened 32 and this year we are on pace for 37 restaurants or so. We will open two more this week, we opened one last week, a couple the week before so we are running right around 805 restaurants by the end of this week.
The new Montreal location near McGill University is an urban concept restaurant. Could you tell me about it?
One of the things we identified four or five years ago was that most of the growth and population in Canada was going to come in the major urban centres across the country and that the major urban centres were significantly different from the patterns that we had seen in Canadian cities for a long time. Vancouver is certainly at the lead of that with the dense downtown cores and more people living close to the city. So high rises, condos, more people living, working, playing, shopping and recreation is in much more urban markets. Part of what’s important for a quick service restaurant is to be highly convenient and well located with respect to those customers. So the traditional quick-service model was half an acre of land out in the suburbs with a drive through and 25 parking stalls, that wasn’t going to work for the new makeup of Canada. So we went to work to think hard about what we can do to change the model of A&W to really appeal to those consumers. We really rethought our whole business and had to rejig it so that it operated in a 1,500-square-foot store front location, we targeted a younger customer because that’s who we see living in these locations.
How has A&W’s branding contributed to the chain’s success?
Even though we are presenting A&W in a much more modern, contemporary location with a younger target customer, what is true to the brand is it’s reputation and for our food, food quality, commitment to food, root beer, mugs, hand-making onion rings and those kinds of things.
In September, A&W announced it would only serve beef raised without any added steroids or hormones, and containing no preservatives or additives. What brought about this change?
Our guests. We spent a lot of time understanding what our guests are interested in and as we continue to talk to guests, we consistently heard people say they're interested in this type of beef so it took us a while to figure out how to do it, but we have been overwhelmed by the response.
You joined A&W in 1980 as a junior marketer. Did this milestone cause you to reflect on your time with the company?
When I joined the company as a junior marketer we were just over 200 restaurants, of which most of them were drive-ins. Today we have 800 restaurants and we don’t have one drive-in left in the business. So yes, reaching 800 restaurants is remarkable because in some ways we have completely reinvented the business.
What does the future of A&W look like?
Our goal is to continue to drive the pace of growth across the country, accelerating our urban restaurants and continuing to bring innovations to the market like hormone-free, antibiotic-free beef and responding to changes that our guests continue to talk about.