Dive Brief:
- Noodles & Company announced Thursday that Drew Madsen, who has served as interim CEO since November 2023, became permanent CEO effective March 6. Madsen succeeds Dave Boennighausen, who resigned in November when the board announced a leadership transition.
- Under Madsen’s direction, the chain will undertake a sweeping menu modernization while maintaining its focus on pasta and noodles, Madsen said on the company’s Q4 2023 earnings call on Thursday.
- This menu update is part of five strategy pillars Noodles will use to revive traffic and sales, Madsen said. Other tactics include operational excellence, improved digital strategy, a long-term catering expansion plan and “fortifying [its] financial position.”
Dive Insight:
In the brand’s earnings release, Madsen said menu changes will be part of a multi-stage process that “reflects our new culinary identity of ‘contemporary comfort kitchen.’” Noodles’ menu hasn’t had a core update in a long time, despite consistent new LTOs, which makes its “menu looks dated compared to newer fast casual competitors,” Madsen said on the earnings call.
“We need to do more than offer Italian dishes living beside Asian dishes. We need to offer dishes that are creatively fused. Dishes with classic profiles, bold flavors and signature twists,” Madsen said. He said the definition of comfort food has bifurcated, meaning “creamy, cheesy, craveable and satisfying,” in some contexts, and “wholesome, homemade, nostalgic and nourishing,” in others.
Noodles hopes to balance these competing definitions — one focused on the texture and flavor of foods and the other on the aesthetic and emotional connotations of the dishes — by adding new meals, changing the menu’s layout and altering the recipes for existing offerings. Madsen said the change will impact “roughly half the menu.”
Though the work of designing new dish concepts is largely complete, according to Madsen, Noodles will slow-walk the rollout of the menu, starting with in-market testing in at least 25 restaurants this summer. A phased introduction to the rest of the system will follow through the back half of 2024 and into 2025.
On the digital front, Noodles will lean on its “new digital menu boards, customer data platform, the Noodles app and the rewards program to grow our guest base and deliver personalized, targeted marketing,” Madsen said in the earnings release.
The fortification of the chain’s financial position, meanwhile, necessitates controls on capital expenditures, slower unit growth and a focus on developing lower-cost prototypes.
These revitalization plans follow a $3.1 million revenue dip in Q4 2023 compared to the year-ago period, when controlling for the impact of a 53rd week in the company’s 2022 fiscal year. AUVs at the company’s 380 company-owned stores fell by $65,000 year over year.
Noodles projects comparable restaurant sales growth between 0% and 3% in 2024, and between 10 and 12 new unit openings. Last year, the company projected “7.5% new restaurant growth system-wide, with a majority of openings being company-owned,” for 2023. Noodles fell short of that goal, opening 18 total restaurants in 2023 and closing nine units, representing about 4% new restaurant openings and 2% net restaurant growth.
