Yes, as a relative newcomer to Chicagoland, I never got the Portillo's fascination either. I assumed it was great in the distant past and resting on its laurels since.

Last week, had a delicious textbook Chicago hot dog at a strip mall mom-n-pop in Sandestin FL. It's just not that hard if you focus on the food and put an effort into each and every order.

And one more whack at Portillo's: According to WTTW-TV's Chicago Tonight Latino Voices, workers at the Portillo's production facility in Addison are voting Thursday on whether to form a union. Among their grievances: No sick days, very limited other time off for long time employees, low pay compared to management.

ronnie_suburban wrote:They served B-grade versions of items that, at least locally, are easily found -- and of higher quality -- elsewhere.

As a counterpoint, it's even easier to find C- and D-grade versions of these same items locally; for every great beef or dog place there are at least as many tired and greasy roadside joints that come up lacking (I've had far too much experience in this regard...thinking about how many meals I had from places like the long-lost "Nor-Bell" in Wicker Park still makes my stomach churn). That's always been the appeal of Portillo's for me - somewhere a bunch of us can go, everyone finds something they like, nobody is disappointed.

PeteF wrote:

ronnie_suburban wrote:They served B-grade versions of items that, at least locally, are easily found -- and of higher quality -- elsewhere.

As a counterpoint, it's even easier to find C- and D-grade versions of these same items locally; for every great beef or dog place there are at least as many tired and greasy roadside joints that come up lacking (I've had far too much experience in this regard...thinking about how many meals I had from places like the long-lost "Nor-Bell" in Wicker Park still makes my stomach churn). That's always been the appeal of Portillo's for me - somewhere a bunch of us can go, everyone finds something they like, nobody is disappointed.

Yeah, I get it. Since I typically hit the same handful of spots, low quality and inconsistency don't come up too much for me. That said, the spot closest to my house is pretty awful, so I've pretty much permanently removed it from the rotation. Why even bother? Otoh, it's virtually impossible for me to drive by Wolfy's or Redhot Ranch without stopping in.

=R=

Union victory at Portillo's warehouse! https://chicago.eater.com/2023/4/14/236 ... on-results

I recently came across this enjoyable article about Michael Portillo, son of the founder, joining a men's book club meeting at a Portillo's restaurant in New Lenox to discuss a book on the company's history, "Out of the Dog House," by Dick Portillo and Don Yaeger. I saw the article in the Chicago Tribune, but it may be more accessible by this link:

Surprise dished up at meeting: Book club discussing Portillo's history visits with founder's son in New Lenox store.

Portillo's expansion plans just got even more aggressive

chicagobusiness.com wrote:Portillo’s is boosting its growth goals by more than half, aiming to open at least 920 restaurants around the country in about 20 years.

It's the first time the Oak Brook-based hot dog and Italian beef chain has updated its growth goals since going public in 2021, when it was targeting 600 restaurants in 25 years. Portillo's also increased its annual growth target to 12% to 15% annually from 10%.

Of those 920 locations, Portillo's projects 800 will be full-scale restaurants and 120 will be pickup, walk-up, or some other format. The company announced the updated goals during an investors meeting this week.

"We are accelerating our growth, but we're doing it in a very disciplined fashion," CEO Michael Osanloo told investors.

Portillo's share price is down 1% today on the news.

Executives told investors that the company will only open full-service restaurants that can do $10 million to $12 million in annual sales. Drive-thru restaurants, which are meant to facilitate online orders and delivery drivers, are targeted to do $6 million to $8 million in annual revenue.

The results Portillo's is seeing with its newer stores are giving the company the confidence to speed up its growth, Osanloo said.

"We have the playbook in place now to start to accelerate," he said. "Our site selection is driving attractive results . . . and it means a lot to us, because we're still cognizant of the fact that we're putting a lot of capital, a lot of investor money into the dirt."

=R=

chicagobusiness.com wrote:Portillo’s is boosting its growth goals by more than half, aiming to open at least 920 restaurants around the country in about 20 years.

That's a lot of bags of beef!

Does anyone know how production works for the non-Chicago locations. Is all Italian beef for the whole country cooked here and shipped out?

MarlaCollins'Husband wrote:

chicagobusiness.com wrote:Portillo’s is boosting its growth goals by more than half, aiming to open at least 920 restaurants around the country in about 20 years.

That's a lot of bags of beef!

Does anyone know how production works for the non-Chicago locations. Is all Italian beef for the whole country cooked here and shipped out?

Purely a guess that it probably ships pre-fabbed but that's only a guess.

I was thinking that even on this announcement, their stock price dropped. Not great news for for them. With the cost to build each new facility having jumped by ~40%, this seems like an awful time to aggressively expand. Also, who uses their Revolver for construction costs? That didn't seem to make any sense to me. Could this announcement actually signal the beginning of the end for this PE acquisition? Maybe with real estate and the cost of money having risen so drastically, their plan isn't workable any more.

=R=

ronnie_suburban wrote:

tjr wrote:

ronnie_suburban wrote:Given their expansion and the money behind it, this is unsurprising. It's a sad, familiar and predictable script.

Yup, and more so because people who go to Portillo's (or Uno Chicago etc etc) in other parts of the country will think Chicagoans know nothing about good eating.

Maybe so. IMO, Portillo's was never great to begin with. They served B-grade versions of items that, at least locally, are easily found -- and of higher quality -- elsewhere. Beyond the convenience of multiple locations and their broad menu, I never quite understood the allure.

+1

Can you sell out if you were always exceedingly mediocre?

Portillo’s launches first kiosk test in Chicago market

https://www.nrn.com/fast-casual/portill ... ago-market

Activist Engaged Capital has nearly 10% stake in Portillo’s, pushes for a turnaround, sources say

https://www.cnbc.com/2024/08/15/portill ... ivist.html

Dave148 wrote:

Activist Engaged Capital has nearly 10% stake in Portillo’s, pushes for a turnaround, sources say

https://www.cnbc.com/2024/08/15/portill ... ivist.html

Sounds like they want to have Portillo’s sell their real estate and shrink the size of their restaurants. Selling a restaurant’s real estate can be a mistake as we’ve seen with Red Lobster.

How Wall Street! Let's focus on short-term gains and never mind the company's future.

Dave148 noted Red Lobster as a warning. On the other side, McDonald's has long controlled its real estate. Part of the fee franchisees pay MCD is rent, providing a stable income source to Mickey D.

Whatever you may think of MCD, no one can deny its financial success over the years.

George R wrote:How Wall Street! Let's focus on short-term gains and never mind the company's future....On the other side, McDonald's has long controlled its real estate. Part of the fee franchisees pay MCD is rent, providing a stable income source to Mickey D.

Yeah. I just watched the movie Founder (Ray Kroc biopic). Ray finally turns rich when a colleague feeds him just that idea: Own the land and restrict franchisees from building anywhere else.

This also reminds me of another Chicago institution: Sears Roebuck. Who's going to buy the land that Portillos sells? Engaged Capital? That would be convenient...

Sears is also an interesting example. Wall Street wizard Edward Lampert said he would save Sears by merging it with Kmart. It turned into a long, slow liquidation with real estate being a key part of the operation. Here's a quick summary of that sad story:

https://www.investopedia.com/news/downfall-of-sears/

At the other end of the business scale, I was in the antiques business and noticed that dealers who owned their premises tended to do better than those that didn't.

Moral of the story: You're better off owning your business property than not.

Portillo's beware!

I remain under the impression that Dick Portillo sold the restaurants, then bought the actual real estate back and rents the property to the operator. A 2014 Crain's Article supports this: https://www.chicagobusiness.com/article/20141210/CRED03/141209748/after-berkshire-partners-takeover-dick-portillio-buys-back-real-estate

Correct, and in 2014 his 20 properties were about half of the portfolio (the article indicates).

But I think they are at 70 locations now and moving to 83-85 within the next 18 months or so.

Expanding while interest rates are up puts quite a bit of interest expense into the equation that wasn't there in 2014....

Now, according to recent filings submitted to the court, Red Lobster has marked another 23 stores for closure across 15 states after the court approved the company’s rejection of unexpired leases. This rejection will further help Red Lobster manage its finances, but it means diners who frequented those locations will have to find a new favorite seafood restaurant in the area.

https://www.fastcompany.com/91178735/re ... ugust-2024

Dave148 wrote:

Now, according to recent filings submitted to the court, Red Lobster has marked another 23 stores for closure across 15 states after the court approved the company’s rejection of unexpired leases. This rejection will further help Red Lobster manage its finances, but it means diners who frequented those locations will have to find a new favorite seafood restaurant in the area.

https://www.fastcompany.com/91178735/re ... ugust-2024

The three Illinois locations that are closing are Geneva, Bourbonnais and Peoria.

Back to the food..

For the first time in more than 20 years, the restaurant chain is launching a new cake flavor: salted caramel spice. It joins chocolate, strawberry shortcake and chocolate eclair.

https://news.wttw.com/2024/08/27/portil ... r-20-years

I just had a chocolate cake from Portillo's. I rarely eat cake, so I am not a good judge, but I thought it was pretty good.

lougord99 wrote:I just had a chocolate cake from Portillo's. I rarely eat cake, so I am not a good judge, but I thought it was pretty good.

Moist.

Portillo’s is feeling new pressure from an activist investor that has ideas on how to improve the company.

Engaged Capital acquired shares worth 9.9 percent ownership, according to an SEC filing. The hedge fund has communicated with the chain’s board of directors and management team about “potential steps to unlock the intrinsic value” of the business. More specifically, that includes improving restaurant performance, increasing restaurant-level cash on cash returns, potentially changing who sits on the board of directors, and even exploring a sale.

https://www.qsrmagazine.com/story/porti ... -investor/

Usually I'd look at a story like this and say, here comes this idiot hedge fund that is a minority stockholder and is only looking at the numbers. But I have to say, some of this makes sense. I had no idea that the drive-thru had become such a problem. My last time driving thru was before Covid, and at that time--always a long line--there was a worker on a headset taking orders while walking down the line, what I thought was a great idea. By the time I reached the pay window, it was ready. What's wrong with that? So after analyzing the metrics, they can improve that by only 15 seconds?!

I also agree that most every Portillo's built in the last 10 years has included the Barnelli's pasta aspect, and the overhead on those stores has to be astronomical. Add to that the spiraling cost of beef. No wonder profits have been down 68%, and my stock that I bought as an IPO got massacred.

Who knows what the answer will be. Smaller stores, with limited food items? How does one retrofit existing stores to reflect that? And maybe the realization that the outside of Chicago and areas with transplanted Chicagoans, no one gives a rat's patoot about an Italian beef.

Quality is still high from all accounts, but Dick Portillo--who I had to indirectly deal with back in the day and was a QC nutcase, believe me--has to happy he's outta there.

jnm123 wrote:And maybe the realization that the outside of Chicago and areas with transplanted Chicagoans, no one gives a rat's patoot about an Italian beef.

A lot of people around the country will be drawn to Portillo's because of the authentic Chicago hot dogs and seeing Italian beef (and sausage) on the menu will likely have many people giving it a try. They would be expected to like the hot dogs and things like the onion rings and chocolate cake. I have no comment on the recent news and expansion plans.

I still go to Portillo's, as my kids are fond of hot dogs. We had a perfectly good experience recently at the drive thru, and another good dine-in experience, at the South Loop location. It was very busy and efficient, as one expects from Portillo's, but I can see why real estate might be a problem. Some of the newer buildings are massive, and only a fraction of the tables are actually filled.

Italian beef definitely has sway outside of Chicagoans, as does giardiniera. I also discovered that Makowski's does all the Polish sausages for Portillo's nationwide. It's even better than the old Bobak's.

Moderately related: one of my college roommates was a Korean national, and I brought him home for a holiday party. He had never had giardiniera. At the end of the night, he took the jar and a spoon and proceeded to eat the entire thing by itself. Chicago food definitely crosses borders.

Well they sure filled a void up here in the Milwaukee Area. There are a few local type places but beef always bad, dogs ok. They outpoint any other place up here for the beef. I get the giardiniera story, I was similar the first time I had them. Cheers.

mtgl wrote:Moderately related: one of my college roommates was a Korean national, and I brought him home for a holiday party. He had never had giardiniera. At the end of the night, he took the jar and a spoon and proceeded to eat the entire thing by itself. Chicago food definitely crosses borders.

Met a Portillo's exec this week at a business event. Complimented him on their Italian Beef, giving special praise to their giardiniera. He told me they use Marconi's, the same stuff available in the stores. So, if you're a fan like me, you can pick some up for home use.

FWIW, I know a lot of people here are not Portillo's fans, and I totally get that. I avoided them for years, based mostly on their chain status. I was converted about five years ago after we picked up my Mom from a two day stay at Lutheran General; right across the street from a Portillo's location. She expressed a strong desire to pick up a few sandwiches to take home, so I reluctantly agreed.

I was stunned to find I actually liked their Italian Beefs. A lot. I think they have some of the most intense, satisfying beef flavor I've ever tasted. I order my IBs dipped twice with hot, so it might be the extra gravy that's adding the beefy punch.

Since then, I've gotten Portillo's IBs many times and now rank them in my top five. I also think they make a reliably good, although not great, CSD.

Buddy

BuddyRoadhouse wrote:Met a Portillo's exec this week at a business event. Complimented him on their Italian Beef, giving special praise to their giardiniera. He told me they use Marconi's, the same stuff available in the stores. So, if you're a fan like me, you can pick some up for home use.

I don't know if the Skokie location is unique in this fact, but they display jars of Marconi giardiniera on the wall next to the ordering line (pretty sure for sale, but I'll need to confirm). It's an open collaboration.