Giraffas trade filet mignon for a hard top on the menu because of inflation

When fast-food Giraffas started in 1981, businessman Carlos Guerra had to deal with inflation approaching 100% a year. At the end of that decade, it approached 100% a month.

“It was crazy, we ordered products from the supplier without knowing how much we would pay, we would be charged the day’s price”, he says. The adrenaline of dealing with hyperinflation in retail was only contained after 1994, with the Plano Real.

The markdowns in the value of the dishes —which mostly include rice, beans, grilled meat and fried eggs—, which used to be done every 15 days, started, over the years, to be carried out every six months.

But this year, the Giraffas lit the warning sign: the third price markdown was already made in 2021. And the menu needed to be modified: the dish made with filet mignon leaves the scene and enters the Churrasquito with a hard top.

Second World War, is inflation returning to show up with more force, especially in food. “I don’t miss hyperinflation at all, but my experience at the time is being used again now, as many of the chain’s younger executives don’t have this history,” he says.

Meats dropped 0.31% in October, according to the IBGE’s IPCA-15 —considered the preview of the country’s official inflation—, the first drop in 16 months. But accumulates high of 22.06% in the last 12 months. The scenario made Giraffas renegotiate contracts with suppliers and make changes to the menu.

The chain launched a promotion of three products with chicken, all below R$ 20 (the sandwich costs R$ 9.90), and removed the filet mignon from the menu.

“It was selling very little and was very expensive for our public. On the other hand, we are selling Churrasquito very well. It is a good quality product, soft and at a very competitive cost, R$ 21.90”, he says.

The Churrasquito for two — but which serves up to three, according to the businessman — was one of the novelties to deal with rising prices.

“We expanded the options of dishes to share during the pandemic, which increases our average ticket”, he says. The chain also has the promotion of the day, at R$19.90. “We are in a competitive environment and whoever is more efficient in managing to retain the transfer will stand out.”

Another initiative to deal with inflation and consumer habits in the post-pandemic period was the launch of lunchboxes for delivery, with dishes between sandwiches and meals, the Safari Marmitas. “A brand made inside the Giraffas kitchen, but only for delivery, as if it were a dark kitchen”, says Guerra.

Each lunchbox costs R$19.90, slightly above the chain’s most popular dish, Brasileirinho, which costs R$15.90, with rice, beans, protein and French fries. The entrepreneur attributes the difference to the cost of delivery and packaging. “But our lunch box is very well served, it weighs 600 grams”.

Until 2019, the delivery service represented between 6% and 7% of the network’s sales, according to Guerra. It reached 25% during the pandemic, and today it has stalled between 12% and 14%.

The businessman plans to launch another brand soon just for hamburger delivery.

The average ticket between 20% and 25% higher for delivery encouraged the chain to join a venture with other restaurants, such as Outback, Pizza Hut and Rei do Mate, and launch its own food delivery application, Quiq, which is still in the process of tests. The app will be open to other restaurants, a way to fight for the food delivery market with the giants iFood and Uber Eats.

Businessman cheers for new government in 2023

Giraffas has around 380 points of sale, all franchises. “Around 10% of this belongs to the partners that make up the holding, but they all act as franchisees”, he says. According to the businessman, 17 restaurants were closed during the pandemic and another 22 were opened.

For next year, the goal is to open 30 units. “We are going to invest R$54 million, R$20 million of which in marketing and R$34 million in new restaurants and store renovations”.

In the Southeast, North and Northeast, the focus will be on shopping malls. In the South and Midwest, there will be more street stores. “We also have a container store project, aimed at smaller cities in the interior, especially in the states of Goiás, Minas, Rio Grande do Sul, Santa Catarina and Paraná”, he says.

The revenue forecast for this year is BRL 615 million, a 40% increase compared to 2020, but an 18% decline over the BRL 747 million in 2019.

“We still feel the retraction in low-income consumption. Our products are aimed at the C-class, a public very affected by the economic crisis and the increase in unemployment”, says the businessman, a critic of the government of President Jair Bolsonaro (no party) .

“I hope that, in 2022, voters vote with more awareness than last time,” says Guerra. For him, Brazil needs a government that finishes the reforms, returns Brazil to the world stage and brings investments.

“The current government did not govern, it created many conflicts, it did not contribute to the control of the pandemic”, says he, who saw his son Alexandre Guerra, former president and former adviser of the Giraffas, get involved last year in a controversy about the adherence to quarantine. In a video released on his social networks, Alexandre stated that “people were worried about the coronavirus, but they should be worried about their jobs”.

A former candidate for the Federal District government by the Novo party, Alexandre ended up leaving his position as a member of the Giraffas board and sold the 1% he held in the group to the holding company. “Today he is doing very well, as director and advisor of the Bio Mundo natural products network”, says Guerra.