WORKFORCE

Putting Employees First

BY Katherine Boccaccio

Panda Express puts a premium on employee satisfaction. The Rose-mead, Calif.-based chain of quick-serve Chinese restaurants has made it a practice since its founding in 1983 to put its employees first. And in doing so, the 1,095-store chain has managed to grow and thrive during a time when the restaurant industry as a whole is feeling the pain of a struggling economy.

Panda Express opened some 160 locations in 2007 and another 160 are slated to open this year. The chain hit the $1 billion sales mark last year and is expected to climb to $1.26 billion by yearend 2008. In 2007, the company marked its 12th straight year of same-store-sales growth—and chainwide, sales increased 19% in 2007 and, in 2008, the company is expecting that number to rise another 20%.

Why the continuing upturn during a nationwide downturn? According to Linda Brandt, chief people officer for Panda Restaurant Group, Panda’s focus on people—and not on number-crunching—is a dominating factor in the chain’s success.

“The way we think about it is that we are in the people business,” said Brandt. “Our mission statement best sums it up: Deliver exceptional Asian dining experiences by building an organization where people are inspired to better their lives.”

Panda’s people-first mission is felt throughout the ranks.

“A pyramid graphic consistently drives home our message,” explained Brandt. “The pyramid is displayed at every meeting, reminding everyone what our focus is.” The pyramid puts people at its base— the biggest part—topped by guests and then by financials. “Our idea is that when we do the right things for people, we’re going to in turn serve the guests properly, and the financial results will flow from that.”

In addition to the routinely presented pyramid, Panda also incorporates a variety of programs and policies designed to underscore the people-oriented culture. One of the most noteworthy is the Panda Leadership Forum, which is designed for high-potential area coaches (Panda’s designation for multi-unit supervisors). After receiving a nomination by a supervisor, Brandt said, the selected employee will travel to the company’s headquarters four times a year to participate in various personal self-awareness and skill-development activities and events. As well, the company has a hiring policy that allows for maximum employee growth. “We have a 70% internal promotion rate from our store level up to general manager,” she added. “Above store level, promotions are 100% internal.” To date, no senior executive has come from outside the Panda ranks.

The emphasis on employees starts at the very top. Company founder Andrew Cherng personally interviews every headquarters employee, whether part-time or full-time. Today, there are 400 corporate employees, working in a culture Brandt describes as nurturing, instructional and focused on giving back, whether through the nonprofit Panda Cares program or through internally driven training and development events.

“This is about bettering lives,” said Brandt. “It isn’t just about Panda.”

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Michaels comps down for the quarter

BY CSA STAFF

IRVING, Texas Michaels Stores reported that total sales for the quarter were $847 million, a 1% increase from fiscal 2007 first quarter sales of $839 million. Same-store sales for the comparable 13-week period decreased 2.9%.

Ceo, Brian Cornell, said, “While our overall comps for the first quarter declined 2.9%, we were very encouraged with the sales of our kids and specialty craft categories, scrapbooking and frame and art supplies. Sales in April showed a reversal of trend with same-store sales up 3.1% on a strong increase in transactions. This positive sales and transaction performance gives us confidence that our new marketing and merchandising programs are connecting with our Michaels customers.”

For fiscal 2008, the company expects same-store sales growth  to be approximately flat given the current economic environment.

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Kirkland’s 1Q sales up 2.1%

BY CSA STAFF

JACKSON, Tenn. Kirkland’s reported that net sales for the first quarter ended May 3 increased 2.1% to $84.1 million from $82.3 million for the first quarter ended May 5, 2007. Comparable-store sales for the first quarter of fiscal 2008 increased 4.3% compared with an 18.8% comparable-stores sales decrease in the first quarter of fiscal 2007.

The company reported a net loss of $2.6 million, or 13 cents per diluted share, for the 13-week period ended May 3, 2008, compared with a net loss of $7.5 million, or 38 cents per diluted share, in the 13-week period ended May 5, 2007.

Robert Alderson, Kirkland’s president and ceo, said, “The first quarter results reflect strong merchandising execution and the benefits of aggressive financial initiatives that have reduced our operating costs, improved cash flow and strengthened our liquidity. During the quarter, we experienced improved customer conversions as shoppers have reacted very favorably to our merchandise mix. The positive comparable-store sales and trimming of unproductive stores led to leveraging of occupancy and distribution costs. Combined with an improvement in merchandise margin and a year-over-year reduction in operating costs of almost $5 million, we were able to post a significant improvement in our pre-tax results.

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