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Jack in the Box to Downsize Menu, Overhaul Drive-Thrus

Is Jack in the Box struggling to keep up with the big players like McDonalds and Chick-fil A? Is their plan to revamp drive-thrus and menu items too little too late? Is a sale eminent?

Photo Courtesy of NRN.

Jack in the Box is exploring a sale amid criticism from its franchisees, plans to downsize redundant items and invest in drive-thru enhancements to improve operations.

The chain has eliminated several redundant menu items at 150 test stores, which has resulted in fewer mistakes, increased speed of service and a reduction in food waste.

Jack in the Box did not say how many items would be scrapped when the system-wide menu reduction goes into effect in July.

Drive-thrus, which account for 70 percent of sales, will undergo a major overhaul.

Changes include adding digital menu boards, placing canopies over menu and order windows, enlarging the order window, and improved landscaping.

Jack in the Box will also deploy employees to take orders from customers sitting in cars in the drive-thru line at higher-volume stores.

The company is still exploring a sale.

Franchised stores, which represent 94 percent of units, saw comparable-restaurant sales decline 0.1 percent.

Company same store sales increased 0.5 percent. The chain said the increase was driven by average check growth of 3.8 percent.

Transactions, however, were down 3.3 percent.

Jack in the Box will not resort to deep discounting. They believe it is not in the best interests of the long-term health of the brand.

The company will continue offer a mix of indulgent items, as well as value meals in the form of bundles.

While performance has improved, Jack in the Box is lagging when compared to quick-service rivals, whose same-store sales are in the positive single digits.

Total revenue was $290.8 million, down from $294.5 for the same quarter last year.

Net income increased to $34.1 million, or $1.31 per share.

Jack in the Box said it plans to open 25 to 35 new restaurants in fiscal 2019, primarily through franchising.

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