Chick-fil-A likely loses out on more than $1 billion in sales every year by closing on Sunday — and it's a brilliant business strategy
- Chick-fil-A likely loses more than $1 billion a year by staying closed on Sunday.
- The chicken chain's founder, Truett Cathy, decided to close all locations on Sundays based on his Christian faith.
- While Cathy's original reasoning may have been rooted in religion, experts say that the choice to close on Sunday is also a brilliant business decision.
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Chick-fil-A likely loses millions of dollars by refusing to open on Sundays. But, the strategy is still worth it for the chicken chain.
The chicken chain earned $10.46 billion in American systemwide sales in 2018, despite being closed every Sunday. Missing out on 14% of possible open business days likely cost the chain more than $1 billion, 24/7 Wall Street reports.
"Although McDonald's does not disclose traffic by day, there is evidence that the weekends are particularly busy, which means that it may post 15% of its sales on Sunday," Douglas A. McIntyre reports. "If Chick-fil-A has a similar traffic pattern, Sundays could bring in sales of at least $1.2 billion."
However, Chick-fil-A will likely never open on a Sunday.
"Closing our business on Sunday, the Lord's Day, is our way of honoring God and showing our loyalty to Him," Chick-fil-A founder Truett Cathy writes in his book "Eat Mor Chikin: Inspire More People."
Cathy continues: "My brother Ben and I closed our first restaurant on the first Sunday after we opened in 1946, and my children have committed to closing our restaurants on Sundays long after I'm gone. I believe God honors our decision and sets before us unexpected opportunities to do greater work for Him because of our loyalty."
In 2000, Truett Cathy's children — including Dan Cathy, the chain's current CEO — pledged to uphold the company's commitment to keep the chain closed on Sundays and to never take the company public.
Why closing on Sunday pays off
Hollis Johnson/Business Insider
While Cathy's original reasoning may have been based purely on his Christian faith, experts say that the decision to close on Sunday is also a brilliant business decision. It's a move that cements Chick-fil-A's reputation, benefits workers, and convinces customers to come back with a greater sense of urgency.
"They don't shy away from being family-focused and they don't shy away from being mission driven," Adam Chandler, who wrote "Drive-Thru Dreams: A Journey Through the Heart of America's Fast-Food Kingdom," told Business Insider. "If there's one thing that everybody knows about Chick-fil-a it is that it is closed on Sunday."
John Hamburger, the president of Franchise Times, pointed to Chick-fil-A's decision to close on Sunday as a counterintuitive sales booster.
"Being open six days a week provides benefits to both the operators and the customers," Hamburger said. "The owner-operator gets the time off. Closed on Sunday conveys a sense of caring and community to the customers."
"Being private means they can do the right thing, not the expedient Wall Street way of doing things," Hamburger added.
Additionally, for customers, the knowledge that they can't get Chick-fil-A on Sundays helps drive them to visit the chain when it is open.
"It provides a sense of urgency — you better get to that restaurant today, because they're going to be closed on Sunday," said Kalinowski Equity Research founder Mark Kalinowski. "I don't think the company designed it that way at all. But it's a call to action every single week."
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