When the going gets tough, the tough go to the mall.
Setting up restaurants in shopping malls was the salvation of A & W Canada, said the company’s chief executive officer Jeff Mooney, who has worked for the chain since 1973.
The fast-food chain’s renewal of fortunes was based on willingness to take risks and rewrite the business plan.
“We had to change our business to survive,” Mooney said at the recent annual meeting of Dairyworld Foods in Calgary. Dairyworld supplies A & W with milk products.
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A & W faced near bankruptcy in the 1970s as customers deserted it for the golden arches. McDonalds, Burger King and Wendy’s came into Canada with huge resources and modern facilities. They could provide a meal in 60 seconds and offered drive-through windows.
“We started to go downhill rapidly,” said the A&W CEO.
At that time A&W used car hops, which meant a longer wait for service of up to 10 minutes.
Executives took a holistic view of how to repair a faltering company. That included making tough changes like shutting down restaurants rather than wasting energy trying to remodel them.
Then came the opportunity to enter mall food courts. No one was keen on the idea because at that time malls were not open in the evenings or Sundays.
On the other hand A&W had brand-name loyalty and there was no competition from other well known fast food outlets.
“We got rich. It was a fantastic opportunity for us,” he said.
On the strength of the mall business the company was able to go back to the on-street restaurant.
As of April 1, the company has 535 outlets across Canada with about half of those in mall food courts. Another 52 new sites are planned this year.
A & W was started in 1919 by two men named Allan and Wright who set up a root beer stand in California. A & W came to Canada in 1956 and became a privately owned company almost immediately. It was the first major fast food chain in Canada and featured car hops and glass root beer mugs.
The only vestige remaining from the past is the chilled glass mugs.
