Chevys Gears Up : Mexican Eatery Plans 3 New Outlets in O.C.
After a successful run in Northern California, the Chevys Mexican Restaurant chain is expanding on a larger stage: Southern California’s already crowded dining scene.
After opening restaurants in Irvine and Fountain Valley in 1992, the privately held company, based in San Francisco, is proceeding with plans for another eight dining establishments in Southern California this year, including three more in Orange County.
Chevys’ record in the Bay Area has been impressive. Since building its first restaurant in Alameda in 1986, the company has opened another 33. Those restaurants had average sales of $2.5 million per unit last year, company officials say. The chain’s total revenue has jumped from $30 million in 1989 to about $90 million in 1992, and the company expects to reach $100 million this year.
In the Southland, the competition is likely to be intense. The landscape here is already packed with restaurants that have the same goal as Chevys: to serve value-conscious customers a good meal for $10 or less. In addition to other chains such as the Acapulco, Red Onion and El Torito restaurants, many family-owned businesses boasting “authentic” Mexican food operate in Southern California.
“If you called me up and hypothetically asked if we needed another Mexican restaurant, I’d have said no,” said Sherri Butterfield, a planning commissioner for Mission Viejo, which voted Monday to approve construction of a Chevys restaurant near Crown Valley Parkway and Interstate 5. “But this is a quality chain, and I think they can carve a niche for themselves here.”
Restaurant industry analysts say there is still room in the Southland for restaurants that combine good food, mid-level pricing and a fresh approach.
“There’s no doubt that there’s quite a few Mexican restaurants in this market and that the restaurant market remains soft,” said Stan Kyker, executive vice president of the California Restaurant Assn. in Los Angeles. “But there has been a trend the past few years to spicy, ethnic foods, and a number of restaurants are doing well.”
“This is a restaurant that knows how to be successful,” he said, “and there’s no reason they can’t do well” in Southern California.
Chevys’ approach is to create a comfortable family atmosphere and to provide fresh food that borders on the exotic.
A huge tortilla machine sits prominently in the middle of a large cantina-style dining room decorated with neon, potted plants and room dividers made of Corona beer cases. The machine cranks out tortillas that go directly to diners’ tables. A supply of freshly chopped tomatoes, onions and jalapeno peppers is always on hand to prepare the salsa, which is made hourly.
The menu features a number of mesquite-broiled items such as chicken, shrimp and quail. Those meals average about $10; more standard Mexican menu items range from $6 to $10.
“The key to our concept is fresh food, what we call fresh-mex , and the flavors are very different,” said Mike Hislop, chairman and chief executive of Chevys Mexican Restaurants. “That’s what distinguishes us from the competition.”
Hislop, who was formerly executive vice president of El Torito, said his company also hopes that its emphasis on low-cholesterol ingredients, such as Canola oil for cooking chips, will appeal to health-conscious Southern Californians. “That approach helped establish us,” he said. “People definitely care about health, and we fill that need.”
Hislop said the two Orange County restaurants did well in their first year. Although he would not give specific figures, he said that each of the two drew as many customers as most of Chevys’ Northern California dining houses.
The expansion plan calls for another 10 Southern California restaurants in 1994. By the end of that year, Hislop said, Chevys anticipates opening restaurants in Arizona and Nevada, and the Midwest after that.
“I know there’s been a recession,” he said, “but we have a lot of confidence in our concept.”
In Northern California, the company won attention with person-on-the-street TV spots that dramatized the chain’s “fresh” theme--the commercials went on the air the same day they were taped. Chevys also advertises there on radio, taxi signs and billboards.
The expansion in Southern California will not be fueled by a massive TV blitz, which Hislop said would be prohibitively expensive.
“It’s more of a grass-roots marketing campaign,” he said. “In the Bay Area we’re viewed not so much as a chain but as a bunch of individual restaurants.”
Since 1986, the company has dominated the Northern California Mexican restaurant market, said Robert Sanchez, a San Francisco restaurant owner.
